Seems we were just talking about this type of threat with another manufacturer, but now Chrysler is putting some pressure on its own dealer network to shape up or shut down. The Wall Street Journal is reporting that Cerberus Capital Management via Chrysler Group's new management team is giving under-performing dealerships just six months to show an improvement.
While state anti-trust laws tend to discourage manufacturers from having too much say in the retail end of things, other companies have found ways around that issue. According to the article, they merely want to "encourage" smaller dealerships to merge with larger ones. But even there, automakers are seldom successful at making the dealers comply, even when sales are dismal. Cutting off supplies or only offering less desirable models or option packages is one way they can make it difficult for a dealer to stay afloat, but they'd rather the dealer just get better at what they're doing or get the heck out. Ford and GM have gone through similar dealer cullings over the past few years. It's certainly not the last we'll hear about it.
[Source: Wall Street Journal via The Truth About Cars]
While state anti-trust laws tend to discourage manufacturers from having too much say in the retail end of things, other companies have found ways around that issue. According to the article, they merely want to "encourage" smaller dealerships to merge with larger ones. But even there, automakers are seldom successful at making the dealers comply, even when sales are dismal. Cutting off supplies or only offering less desirable models or option packages is one way they can make it difficult for a dealer to stay afloat, but they'd rather the dealer just get better at what they're doing or get the heck out. Ford and GM have gone through similar dealer cullings over the past few years. It's certainly not the last we'll hear about it.
[Source: Wall Street Journal via The Truth About Cars]
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