According to the latest bankruptcy court filings by Chrysler, the company plans to cut 789 dealerships (one quarter of the current dealer network) in an effort to emerge as a financially viable company.
The company sent out overnight letters to the dealerships that will be eliminated.
As expected in bankruptcy, Chrysler will not buy-back the vehicles, tools or parts, but it will put the dealerships in touch with surviving dealers who can then work out a purchase.
Chrysler also plans to push ahead with a plan to put all of its brands under one roof. Currently 68 percent of dealerships carry Dodge, Chrysler and Jeep products, but after the 789 are closed, that number will rise to 80 percent.
There appears to be even more strategy involved as well as 345 of the dealerships being shut down (or roughly 44 percent) also sell vehicles from a competing brand.
Steven Landry, Chrysler’s VP of Sales, spoke optimistically about the future of the 789 dealerships, stating that 83 percent of the businesses sell more used cars than new and that half of them sell fewer than 100 cars per year. “The majority of these dealerships are going to continue on and prosper either selling used cars or other brands,” he said.
The 789 dealerships will receive a 23 business day court review of their individual situation.
[Source: Automotive News]