Fiat Chrysler intends to add 380 new outlets throughout the U.S. The company already has 2500 stores in the country.
This decision has been taken by the carmaker against recommendations from Urban Science which is the dealership location consultant to Fiat Chrysler Automobiles (FCA).
The proposed expansion is likely the company's way of trying to promote sales, which have been plummeting for the last few months.
Fiat's market shares also dropped to 12 percent in Q4 2016 from 13.5 percent in Q4 2015.
Dealers Unhappy With The Expansion
The decision to add new outlets, however, has not gone down well with the existing dealers.
In 2016, Fiat changed its Volume Growth Program which offered incentives to sellers who met sales goals. However, the company reduced these incentives drastically to increase its profit margin from 6.4 percent to 7.4 percent from 2015 to 2016.
Dealers have also faced issues because of fewer sedan models and stalled production of vehicles from the company such as the Dodge Dart, Chrysler 200 and the Jeep Patriot.
The company has transitioned recently to focus more toward pickups, SUVs and crossovers. The 2017 Jeep Compass is currently under production in Toluca, Mexico, and is expected to make its way to U.S stores in a few months from now.
In certain cases, dealers have been able to handle matters amiably by acquiring rights to additional franchises through a settlement with the factory.
However, in states like Louisiana and Texas, there have been instances where dealerships have turned to the state for assistance and aid.
Bergeron Motors in Metairie, Louisiana, is one such dealer who has filed a complaint with the state regarding the opening of a new dealership in Kenner.
The dealership has also apparently complained that the new outlet would cause issues as the population would need to drive past Bergeron if they want to do business with the new store.
Similar protests were also filed in state of Texas with the assistance of the Texas Department Of Motor Vehicles regarding the opening of new outlets in various parts of the state. No protests, however, occurred in metro Houston where 3 new outlets were added, taking the dealership figure to 17.
Location Of The Dealerships
There has been no official word yet regarding the location of the new outlets. No concrete knowledge has been unearthed either on where all the 380 Fiat Chrysler outlets would be opened.
It remains to be seen whether this kind of rapid expansion by the company actually helps it in enhancing revenue.
Photo: T.Ron Scott | Flickr
