Industry Headlines

Chrysler to Partner with Fiat and File for Bankruptcy

SANTA MONICA, CA - Chrysler is filing for bankruptcy, and this is not all bad news for the company and for the economics of the automotive industry at large.

“The merge with Fiat is a critical milestone in the evolution of Chrysler, and holds much more promise than the merger with Daimler in the ‘90s,” says Edmunds.com CEO Jeremy Anwyl. “Chrysler has one last chance to create relevancy for its brand in order to convince consumers to overcome the risks and buy its vehicles.”

“If Chrysler is to have a post-bankruptcy future, building cleaner, more fuel-efficient vehicles that help us kick our oil dependency has got to be part of it, as it must for all automakers,” says John O’Dell, editor of Edmunds’ GreenCarAdvisor.com. “And, Chrysler’s tie-up with Fiat could bring a whole new batch of fun to drive, fuel-efficient and environmentally friendly cars to our shores.”

“It appears Chrysler will use bankruptcy to cut dealers and has the government's support to do so, apparently,” says Michelle Krebs, editor of Edmunds’ AutoObserver.com. “President Obama's automotive task force reportedly wants Chrysler to reduce its dealer ranks by more than half to put it more in line with its market share.”

As of the end of the first quarter this year, Chrysler had about 3,200 dealers and 11% market share. By comparison, Toyota had just under 1,500 dealers and 16% market share. Fewer dealers generate more sales-per-dealer and profits for each dealer. An automaker then can reduce its costs in terms of dealer-support infrastructure, financing and incentive pay. Fewer dealers also allow an automaker to better control its inventories.

For consumers, the government has promised to guarantee warranties for Chrysler. “No one can blame car buyers who shied away from brands that were mentioned in the same breath as the word ‘bankruptcy,’” says Edmunds.com Consumer Advice Editor Philip Reed. “Now that their warranties are being guaranteed, Chrysler and GM vehicles are good deals which are worth considering.”

Year to date, Chryslers have been sold for an average of 22.6% off sticker price while the industry average discount is 16%, according to Edmunds.com’s data.

Did you enjoy this article? Click here to subscribe to Quality Magazine. 

You must login or register in order to post a comment.

Multimedia

Videos

Podcasts

Karen Spencer, Clinkenbeard's quality manager, discusses what makes the plant stand out, advice for other plants, and looks to the future.
More Podcasts

Quality Magazine

CoverImage

2015 April

The April 2015 edition of Quality Magazine includes this years Quality's Professional of the Year.

Table Of Contents Subscribe

Topics to Talk About

What topics would you like to see Quality cover more?
View Results Poll Archive

Clear Seas Research

qcast_ClearSeas_logo.gifWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

STAY CONNECTED

Facebook2015_40 twitter_40px.png  youtube_40px.pnglinkedin_40px.png  GooglePlus_40

eNewsletters