US: Chrysler woos foreign dealers
Chrysler Group on Wednesday announced plans to expand its dealer operations in key markets outside North America as 70 potential investors attended a forum previewing dealer ownership opportunities.
Sales performance outside North America continues at record levels, the automaker said.
"As Chrysler Group continues to increase sales and expand operations in markets outside North America, the company has identified a need for additional sales outlets in key established and growth markets," it said.
"While we will continue to aggressively defend our position in NAFTA, it is important that we expand in other markets so that we are not as dependent on the ups and downs of a single region," said Chrysler Group president and CEO Tom LaSorda. "With a more global focus we will be better able to take advantage of emerging opportunities."
Chrysler has invited "potential partners" from 19 countries, including Russia, Japan and Middle East, to meet over three days with senior executives at its Auburn Hills, Michigan, headquarters.
Among other things, they will learn about Chrysler growth plans outside North America and see the products and powertrains that would be available through their franchise if they choose to invest.
This week's forum follows a conference held recently in China which 140 dealers attended.
"Due to the expansion of our global portfolio, we see an opportunity not only to strengthen the relationship with our current dealers, but also to look for new business partners that can help us to take our international business to the next level," said Michael Manley, executive vice president - international sales, marketing and business development.
Outside North America, Chrysler has about 1,400 sales outlets and plans to add about 100 in the next two years. Additional dealer growth will increase the company's presence in growing markets, such as Russia and China, where the existing dealer network is doing well, but the goal of additional sales growth will require more locations.
In 2006, Chrysler extended Dodge brand availability in key markets with the launch of the Caliber hatchback (effectively replacing the Chrysler Neon), the brand's first volume vehicle outside North America.
The Nitro and Avenger are following this summer (reaction here in the UK has been muted with consumer writers criticising such aspects as cabin material quality and ride and handling).
Nonetheless, Chrysler said Dodge brand demand has been "strong so far this year" as the Caliber notched up sales of 13,265 units year to date, making it the top-selling Chrysler vehicle outside North America. By 2009, Dodge could account for roughly 30% of the company's international sales, it said.
"Many dealers outside North America have been very successful with the sales of all three Chrysler Group brands in their local markets," said Thomas Hausch, vice president of international sales. "In western Europe alone, we increased our return on sales by more than 20%, from 1.7 in 2005 to 2.1 in 2006. This is a clear indication that the new vehicles we are introducing are well-received by our customers and that we deliver to our dealers one of the best return on sales within the industry."
Sales growth for Chrysler Group as a whole outside North America has reached an unprecedented two full years of monthly gains, and year-to-date growth of 16% (91,412 units) over 2006. Much of this is attributed to the increase in the number of models that are being introduced worldwide with options that meet the needs of global customers - such as a healthy line of Mercedes- and VW-made turbodiesels for Europe.
Chrysler plans to double last year's sales outside North America and reach approximately 400,000 units in the next five years.
To support this growth plan, between 2003 and 2007, the automaker will approximately double the number of products available outside North America from nine to 20 vehicles. The company will also triple the number of vehicles built with right-hand-drive from six to 18; and, quadruple the number with a diesel engine option from four to 16.
Chrysler now sells vehicles in about 125 countries but sales outside North America currently account for only around 8% of total volume.
Vehicles available outside of North America come from all three Chrysler Group brands, though availability of some trucks and SUV models designed largely for the US is limited.