Chrysler Group has reached an agreement to sell its factory-owned dealership in Los Angeles.
If the deal to sell Motor Village of L.A. is completed, it could stave off disciplinary action by the California Department of Motor Vehicles, which filed administrative charges last week accusing Chrysler of improperly operating a factory-owned store at Motor Village.
A Sept. 27 meeting on the charges is scheduled before the California New Motor Vehicle Board, which acts like a court to settle auto franchise issues.
The prospective buyer is New Century Automotive Group, a North Hollywood, Calif., group that owns three Volkswagen dealerships and single BMW, Mini and Infiniti stores. New Century is owned by Dennis Lin.
Chrysler spokesman Ralph Kisiel said: "We will work expeditiously to close the deal in October."
Chrysler held the grand opening for the store with great fanfare last November on the eve of the Los Angeles Auto Show. Chrysler CEO Sergio Marchionne attended the event. The company said it wanted to use the store as a showcase for its vehicles and a test bed for new retail techniques.
The dealership opened for business in January.
But some dealers objected, saying the store violated state franchise laws, which prohibit a factory-owned store within 10 miles of privately owned dealerships. The California New Car Dealers Association filed a complaint with the DMV in March and a hearing was held in May. The department filed its charges with the board on Sept. 14.
Regarding the allegations, Kisiel said: "We are continuing to work with the DMV. We hope we will find a resolution for all parties that are potentially affected."
Chrysler is trying to reclaim lost market share in California, where it has a 4.38 percent share statewide. In Los Angeles, Chrysler's share is even lower -- 3.89 percent. Chrysler's U.S. share was 10.2 percent for the year through August.
New Century's Los Angeles-area dealerships include: Century West BMW and Mini of Universal City, New Century VW in Glendale, Calif.; Puente Hills VW in Industry, Calif., VW of Van Nuys and Orange Coast Infiniti in Westminster, Calif.
Said Kisiel: "We were looking for a dealer who will continue our vision for a showcase for our brands, somewhere we could experiment with new dealership processes, particularly new processes with customer care. Dennis Lin will continue with our vision."
The dealership is in a 189,000-square-foot building in downtown Los Angeles that overlooks Interstate 110. The store is divided into separate brand salons for Chrysler, Dodge, Jeep and Ram.
'A great marriage'
"I really think that Chrysler Group and Fiat are a great marriage," Lin said in a prepared statement. "We have Fiats now and more coming in the near future. I'm excited about the new and improved Chrysler, Jeep, Dodge, and Ram products that were launched this year, and the new product coming out now for 2012. I'm very comfortable adding Chrysler Group and Fiat to the product lines I already sell.
"Motor Village is in an excellent location in downtown Los Angeles, a highly visible dealership to showcase all the brands."
A tall glass tower of the building displays vehicles to motorists passing on the freeway. There's a separate Fiat store on the site, the first Fiat store to open in the country.
Chrysler says it has been trying to find an operator for the store. Lin is buying only the dealership. Chrysler Realty will continue to own the land and the buildings, which are very expensive in downtown Los Angeles.
Lin declined to be interviewed, saying he preferred to wait until negotiations were concluded.