Future of Big 3 dealers in doubt

After shrinking their U.S. manufacturing operations, Detroit's automakers are scaling back their big dealer networks to bring them in line with the domestics' falling share of the U.S. auto market.

Chrysler LLC, under pressure after losing an estimated $1.6 billion last year, is pressing its dealers to consolidate as it prepares to cut its product range to eliminate overlapping models.

Chrysler President Jim Press said Friday that the newly private automaker wanted to combine more Jeep, Dodge and Chrysler outlets under one roof under a program dubbed Project Genesis. We’re not doing it for us," said Press, formerly Toyota Motor Corp.'s top U.S. sales manager. "We want our dealers to be the most profitable. We want the most valuable franchise."

Press spoke at the J.D. Power and Associates Automotive Roundtable in San Francisco, held in conjunction with the National Automobile Dealers Association convention opening there today.

In contrast with the leading Japanese automakers, which have few U.S. dealers selling many vehicles, Detroit's automakers have many dealers selling fewer vehicles each.

According to J.D. Power, there are more than 4,000 Chevrolet outlets in the United States, selling 554 vehicles a year each, while Toyota Motor Corp. has more than 1,200 Toyota outlets with annual sales averaging nearly 1,800 vehicles each.

Press said the process of thinning the dealer network would take three to five years, but he said the company did not have fixed targets for the number of dealers it needs or the number of vehicles it will have in the future.

Still, the broad outlines were clear. "A 4 million (annual sales) company needs 32 vehicles," he said. "We're not a 4 million company." Detroit News