Chrysler to set up separate Fiat dealer network

[July 05, 2010]  DETROIT (AP) -- Chrysler Group LLC will set up a separate dealership network to sell cars made by Italy's Fiat Group SpA when they are reintroduced in the U.S. later this year.

The Auburn Hills, Michigan-based automaker said existing Chrysler, Dodge, Jeep and Ram dealers will get a chance to apply to sell the Italian Fiats, but they must be able to operate separate facilities with different sales and service teams in order to win a franchise.

Fiat, which last sold cars in the U.S. in the 1980s, will return to the country in December with the debut of the Fiat 500, a highly efficient, very European-looking small car. Other Fiat models are likely for the U.S., but the company has not made announcements beyond the 500, known in Italy as the Cinquecento.

Fiat was given control of Chrysler by the U.S. government when the automaker emerged from bankruptcy on June 10, 2009. The company would have run out of cash and been sold off in pieces without roughly $15 billion in aid from the U.S. and Canadian governments. While noting that the company still has a long road ahead to recovery, CEO Sergio Marchionne last month touted Chrysler's first-quarter operating profit, two straight months of sales gains and plans for 16 new or updated vehicles by the end of this year.

The Fiat dealerships will be located in roughly 125 U.S. metropolitan areas that Chrysler has found to have high small-car registration and high potential for growth in selling smaller cars, said spokesman Ralph Kisiel. The company expects to have 200 Fiat dealers in 41 states.

Letters will go out Monday to Chrysler Group's roughly 2,300 dealers nationwide giving them general guidelines for applying to become Fiat dealers. More specific requirements will come in application packets for interested dealers.

"Dealers are going to have to demonstrate how they will market, sell and service Fiat vehicles with a new customer service model," Kisiel said.

He would not say if dealers will have to pay to buy a Fiat franchise. Generally, interested dealers must be in the 125 designated markets, meet customer satisfaction and minimum sales requirements, and show that they have the financial resources to support the brand, Chrysler said in a statement.

Dealers outside the 125 identified markets will be considered for Fiat franchises provided they meet all the performance standards and financial requirements, Kisiel said.

Chrysler hopes to announce the dealership network in September, three months before the 500 is to arrive in the U.S. Chrysler also has announced plans for a 500 convertible and an electric version, but no timing has been revealed for those models to go on sale.

[Associated Press]

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