As of June 1, Fiat's German sales organization has taken over sales activities for the Chrysler, Jeep and Dodge brands in Germany.
The Chrysler sales organization in Berlin is being dissolved. Its employees are being offered new contracts in Frankfurt. The Chrysler wholesale unit in Stuttgart and its 70 staff are migrating into the corresponding Fiat organization in Turin.
The move is part of the Fiat group's global strategy. Fiat CEO Sergio Marchionne believes that a high-volume manufacturer will need an annual sales volume of at least 6 million vehicles in the future.
He wants to reach that level by 2014. That's the reason that Chrysler took about a 20 percent share in Chrysler and took over its management of the U.S. carmaker about a year ago.
The new alignment is affecting each of the two automakers' brands. The Italian brands Fiat, Alfa Romeo and Lancia will benefit from the expansion of their product line-up into larger vehicles and SUVs from Chrysler.
The Chrysler brand will disappear totally in Europe in favor of Lancia, except in the UK and Ireland where Lancia are not sold. Dodge is shrinking into a specialty brand. The Jeep brand, an SUV icon, is the only one due to be significantly strengthened.
All 70 Lancia dealers in Germany had their contracts cancelled, as did Chrysler's 115 German dealers. The measure will take effect June 1, 2011. Manfred Kantner, Fiat chief for Germany, wants to gain as many competitive Chrysler dealers as possible for the "new Lancia," the brand's working title.
The new network is due to have a total of 154 operations in Germany, while 800 dealers with 1,000 locations are planned for Europe. That's 350 fewer dealers than both networks have today.
The expansion of the product line-up above all aims to secure higher incomes for the "new Lancia" dealers.
A total of eight new models are planned between now and 2014. That will enable Lancia to cover 61 percent of Europe's automobile market. Today Lancia covers 28 percent, and Chrysler 9 percent.
Marchionne has set an ambitious goal: He wants to boost Lancia-Chrysler sales in Europe to 300,000 units by 2014. Germany would account for 41,500 of the volume.
The two brands together sold just 132,500 vehicles in Europe last year.
Chrysler dealers are expected to especially benefit from a new segment for the brand, featuring lower prices and a new target group.