Chrysler dealers are happy about Daimler divorce

US carmaker to add 100 stores in Europe by 2009

Amy Wilson
Automotive News Europe
June 11, 2007 - 1:00 amMUNICH -- Don’t expect many changes in Chrysler group’s European dealer network even after the US automaker finalizes its divorce from DaimlerChrysler.

Chrysler executives expect to continue the automaker’s European expansion even after buyer Cerberus Capital Management takes control. Chrysler has about 1,000 European dealers and plans to add another 100 in the next two years, said Thomas Hausch, Chrysler vice president of international sales.

Dealer contracts will not change, Hausch said. Chrysler will continue to use the same wholesalers and importers in its European markets. “We have an as-good or even better future with this decision,” Hausch said.

Some dealers are praising the split.

Chrysler’s 56 dealers in Spain are more optimistic than ever, said Francisco Salazar Simpson, president of the Chrysler-Jeep-Dodge dealer council in Spain. Dealers in Spain expect Cerberus to invest more heavily in international growth, which should improve dealer profits, Simpson said.

An analyst also said the breakup could help Chrysler.

“Assuming the European expansion remains a priority for the new Chrysler, then I would think it would actually benefit from not being linked to Mercedes-Benz,” said Philip Wade, managing partner of HWB International in Warwick, England. “They got rather lost when they were joint importers dealing with both brands.”

Michael Manley, Chrysler’s executive vice president for international sales, marketing and business development, said dealers will continue to deal with the same people.

But analysts warn that some dealers that sell both Mercedes and Chrysler products will want to drop their Chrysler franchises after the sale to Cerberus is complete. About 20 percent of Mercedes dealerships in western Europe also carry Chrysler products.

Willi Diez, director of the Institute for Automotive Research at the University of Applied Sciences Nürtingen-Geislingen said that 10 percent to 15 percent of Germany’s Mercedes-Chrysler dealerships could drop the US brands.

Chrysler executives say they don’t anticipate a surge of dropouts.