Marchionne Addresses Dealer Reinstatements at NADA/IHS Insight Forum
NEW YORK — As Sergio Marchionne, chief executive officer of Chrysler, took to the stage on Wednesday for the NADA/IHS Global Insight Automotive Forum in New York, he said the important role that dealers play in his company's reconstruction cannot be overstated.
"The development of a quality distribution network was a key element in the turnaround at Fiat. Chrysler is also making a major commitment to strengthening relationships with its dealers," he told the audience.
Basically, he acknowledged that dealers are the "ambassadors" of the Chrysler and Fiat brands. He stressed that dealers are "crucial" to re-establishing connections with customers.
"We have redefined and raised the standards expected of our dealers, but we are also working with them to thoroughly implement those standards and support them in improving performance," Marchionne explained.
"Our plan is to invest over $500 million in the network over the next five years. The ultimate goal is to turn more of our customers into loyal, repeat buyers and promoters of our products and of our dealers," he continued.
He went on to say that his company is "intent on protecting the health of our existing dealer network through the defined arbitration process."
To ensure a strong sales organization, Marchionne said Chrysler has offered letters of intent to 50 dealers to rejoin the network.
"These 50 dealerships are in locations that will benefit our customers but not have an adverse effect on existing partners in our network," the CEO explained. "Reaching agreement will save both dealers and the company the expense of arbitration. When we balanced the effects on our dealer network with the resources required by the arbitration process, these resolutions made sense."
He went on to say, "Coupled with actions already taken, this step brings the number of dealers we've invited to be a part of Chrysler's future to 86. In total, this represents 25 percent of the dealers who chose to arbitrate Old Chrysler's decision to resize its dealer network to meet the market, an action that was affirmed by the federal courts as a reasonable exercise of the company's business judgment."
Marchionne said he recognizes the pride, sense of partnership and desire of dealers to be better performers, which heavily impacts dealers' commitment to customers.
"And that is one reason why we have worked with such commitment to ensure Chrysler can move forward on a solid footing," he noted.
"At the same time, we recognize that a dealership is much more than merely a sales organization. Our dealers are the face our customers see. They are the guarantors of our credibility, our representatives in both image and substance," Marchionne said.
"We need strong, competitive dealers that can work with us to enhance the reputation of our brands and make customer satisfaction a priority. We're in this battle together. We must put our trust in each other and make a true, full-faith effort. Collectively, we have learned from the past. But now is not the time to look in the rear-view mirror. Rather, we must focus on the road ahead," he pointed out.