Helping Chrysler-Jeep dealers fight rising costs and boosting dealership profitability is at the top of Gary Panteck's 2006 agenda.
"We need some help from the factory," says Panteck, chairman of the Chrysler Jeep National Dealer Council.
For example, advertising vehicle maintenance available at dealerships might draw traffic, Panteck says.
Panteck is the dealer principal at Brunswick Auto Mart Inc., in Brunswick, Ohio, and at Chrysler-Jeep of North Olmsted in North Olmsted, Ohio. He was interviewed by Staff Reporter Mary Connelly.
What are the hot products at Chrysler and Jeep?
The Stow 'n Go (minivan) has been outstanding since it came out. The Chrysler 300 is doing extremely well.
On the Jeep side, as 2005 went on, Grand Cherokee gained momentum. Wrangler always does well. Commander is taking off very well. With the Commander, the customer has to drive the vehicle. When they first see it, they might say it is boxy. If they drive it, they buy it.
What new products are on the way?
We're getting a Grand Cherokee SRT 8. We have a couple of new Jeeps and a new (Chrysler) Sebring sedan later this fall. The (Jeep Compass and Jeep Patriot) give us versatility.
Are there holes in the Chrysler-Jeep lineup you would like to see filled?
We're in pretty good shape. There is the Firepower (roadster concept shown at the 2005 Detroit auto show) they are talking about. I don't know if they will build it but I would like to see that. It would make a statement for the Chrysler brand. All in all, I think we have it pretty well covered.
What products do you want to drop?
The only product that didn't do well for us is the Sebring coupe, and we are not making that anymore.
What challenges do Chrysler and Jeep dealers face in the next year?
There is a lot of bad news at Ford and General Motors. Chrysler had a pretty good 2005 and anticipates a pretty good 2006. We are still a part of the Big 3, and you don't want their bad news to rub off on the Chrysler group.
You have to be careful of the bad news at Ford and GM. We just have to stay positive
And competition from the imports. The imports are gaining ground.
I am also a Toyota dealer. They have some outstanding plans for the next five to 10 years, and so does Honda. Also, you have to have some concern over the Koreans.
What is the top priority of the dealer council in 2006?
Dealer profitability. The competition has forced our selling price to be lower. The interest rates went up as the year progressed and my floorplan expense increased.
Overall, profitability is our number one concern. It started to be in the last three quarters of 2005. We need some help from the factory. Maybe look at some ways to insulate our margins. We are looking into that. We need help from the factory to be more service-and-parts dealers.
We also need to work closely on the advertising and marketing side of the business. We need to be sure we have the incentives in place we need and then market the cars properly to do the numbers we need to do.
How many dealers are unprofitable?
I don't have a number. Well into the majority are profitable. But we always have concerns. All of our expenses have increased, health care, interest rates.
Are your dealers making money on new-car sales?
What are you looking at with the factory to increase profitability?
We are looking at exploring a few different ways. The number one thing is increasing the service and parts business.
What can the factory do?
Possibly some advertising. And help educate the dealers a little bit. The quality of the cars has increased so much. Maybe a little education on how to sell maintenance. Toyota and Honda have done a better job selling maintenance.
What do you want to see happen as you work on advertising and marketing?
The ads that are going to get people's attention are product-driven, brand-driven. There has been so much screaming about the deal in the last couple of years. I would like to see us scream a little more about how great the product is. Of course, you can't leave the deal out of the equation.
But place more focus on products and attributes?
Right. The "Miles of Freedom" (free gasoline program) may not have had a tremendous take rate in the dealership, but it had the consumer coming into the showroom and asking questions about it. It created traffic and curiosity and brought them into the showroom.
Are dealers satisfied with local advertising? Are the ads effective?
They are very effective. There is one reason why they are very important. Most of us could not afford to do the TV advertising. This gives us a presence on TV that we wouldn't have. And it takes it to the deal. We take it to the showroom and that is extremely important.
What is the number one thing the factory can do for its dealers?
Produce high-quality, desirable vehicles. We need the deal. I never want to say we don't need the deal. But product really brings people into your showroom. Look at the success of the 300. The PT Cruiser was hot from day one and is still drawing interest.
Desirable vehicles, high-quality, along with a great deal.
What are the dealer council's top concerns?
Number one, dealer profitability.
Number two, providing vehicles in quantity and price that meet what our customers are looking for. They have listened to us when we have felt that the equipment mix should be a little different. They have been very good that way.
And getting the marketing message out. Try new things. We need to find ways to bring import buyers into our showrooms. A strong marketing message will help us do that. "Miles of Freedom" helped us. I am not sure every buyer out there is looking for a deal.
What do you mean by "providing vehicles in quantity and price"?
Making sure we have enough of the hot vehicles so the dealers can sell them and make a good living. Price is competitive pricing.
How satisfied are dealers with Chrysler and Jeep?
They have been very satisfied with the Chrysler and Jeep brands. The sales of Pacifica, 300, Grand Cherokee, the Commander are doing very well.
With Commander, we didn't have a seven-passenger vehicle before. We are bringing people in we didn't have in our showroom before.
Stow 'n Go just kind of stole the market. There are a lot of good minivans out there. Ours has consumer appeal, and they do a good job marketing the vehicle. It is fairly priced.
Do customers ask for hybrid vehicles?
I don't think that is a major thing. I have never lost a deal on a Chrysler or Jeep because we don't have a hybrid.