US: FCA sales streak puts pressure on dealers image

Fiat Chrysler Automobiles US, formerly the Chrysler Group, is set to report its sales for March on April 1 and the tally is going to be no April Fool’s – a five-year streak of increasing sales could be achieved or fall just one month short.

The period – one of the longest in which any automaker managed to post monthly sales increases – has been deeply transformative for both the automaker and its US dealers. For the former the results have helped shun away the disgraceful image that surrounded it back in 2009 when it was saved by the government and later on acquired by Italy’s Fiat SpA. The company has now morphed into Fiat Chrysler Automobiles NV, the world’s seventh-largest automaker, with its FCA US subsidiary axing the old corporate name of Chrysler Group LLC. “It is by no means for the faint of heart, but I’m looking to continue to grow,” comments Reid Bigland, FCA’s US chief of sales. “Growth is nonnegotiable from my perspective.” The comments underlie the huge pressure set on the dealership network.

There are around 2,600 dealers for FCA US, and some have turned into Las-Vegas style high rollers. Those having medium-sized businesses say it’s not unusual to have $100,000 or more in monthly net profit – but all hangs in balance on the decision to reach the carmaker’s utterly aggressive monthly delivery thresholds. Called the Volume Growth Program, dealers usually manage to fulfill the quota by resolving to higher incentives and worse overall deals, and often spend more than usual on advertisement. If they fail to make the tally, they usually post huge monthly losses.

Via Automotive News