DETROIT -- Chrysler Group plans to finish the consolidation of its dealerships into three-brand stores by the end of 2011, Peter Grady, the automaker's vice president of network development and fleet, said Wednesday.
As it consolidates its network under Project Genesis -- a process accelerated in bankruptcy this summer by the rejection of 789 dealer franchises -- Chrysler wants to dramatically increase the number of vehicles each store sells so dealers can be more profitable and financially healthy.
Grady said the average Chrysler dealership is on pace to sell 342 vehicles in 2009. The company wants to increase that to about 785 per year by 2014, he said.
With all of Chrysler's financial problems, dealers have been insufficiently capitalized to make improvements to their stores, Grady said. The company hopes that will improve.
“Only 36 percent of network has return on sales larger than 1.5 [percent], the NADA average,” he said. “We expect 60 percent of network will exceed that average by 2014.”
Despite challenging economic conditions, a number of Chrysler dealers have been investing in their buildings and franchises, Grady said.
“Since June 10, dealers have committed to more than $250 million in capital investment,” he said here today at Chrysler's presentation of its five-year plan. “That includes 20 new buildings and 200 major renovations.”
Chrysler and its dealers will invest more in the future, he said: “We plan to invest over $500 million in the network over the next five years -- $120 million next year alone,” Grady said.
Chrysler is trying a pilot project in the San Francisco Bay Area under which a regional dealership controls a large area, Grady said. The dealer, Putnam Chrysler-Jeep-Dodge-Ram in Burlingame, will operate satellite service outlets and a retail boutique at the Stanford Mall in Palo Alto.