Chrysler has urged US dealers to cut costs and margins and order more vehicles as its restructures to secure more government aid.
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“They (dealers) understand the place where we are in regard to our plan and they understand the need for all parties to put some skin in the game,” Chrysler vice chairman Jim Press told Reuters after a meeting with hundreds of its dealers at the National Automobile Dealers Association convention.
He said the automaker would start negotiations with dealers this week to discuss details of the cost cuts.
“They also realise they can help us save some money that will help preserve the future of the company and make us more successful,” he added.
Chrysler has asked dealers to ramp up vehicle orders for the months of February and March, even after the average inventory of cars and trucks on its US dealer lots totalled 115 days of supply at the end of December.
US sales executive Steve Landry reportedly said Chrysler wants to sell 78,000 vehicles to dealers in February – dealers said January orders were around 22,000 units.
Chrysler suspended production at all of its plants in late December and the automaker has not had any revenue for the past month, Reuters noted – like rivals it books revenue when vehicles are produced and sold to dealers.
A Michigan Dodge dealership owner told Reuters Press assured dealers that Chrysler would pass the federal oversight of its turnaround plans and make it through the second quarter and beyond.
Dealers reportedly have been also told to accept half a percentage point reduction in profit margins on vehicle sales and they will no longer be reimbursed for filling up fuel tanks before vehicles are sold, Landry said.
He added Chrysler would announce steps dealers and other stakeholders are required to take to achieve turnaround later this week.
