Fiat Announces Shakeup of European Dealer Network – Plans to Drop Chrysler Name

Fiat S.p.A. has announced a sweeping restructuring of its European distribution network, which will reduce its Lancia and Chrysler dealerships by about 350. The plan also calls for Chrysler products to be sold under the Lancia name throughout Europe with the exception of Ireland and the UK, where Lancia vehicles are not sold. The Chrysler name will continue to be used in those markets.

Fiat has notified about 1,150 Lancia and Chrysler dealers that their contracts will end on May 31, 2011 in order to comply with European Union rules that require automakers to provide 12-months advance notice of contract terminations. Lancia currently has 595 dealers and 785 stores throughout continental Europe. In 1991, Lancia ceased selling vehicles in Ireland and the UK.

Lancia is Fiat’s near-premium line and sells primarily in its Italian home market. Of the 121,000 Lances sold in Europe in 2009, 102,000 were sold in Italy.

Chrysler’s contract, which includes its Jeep and Dodge brands, has 556 dealers and approximately 750 showrooms in the UK, Ireland and the European continent. Last year, Chrysler sold a mere 11,500 vehicles in Europe.

In an email, Lancia-Chrysler CEO Olivier Francois said, “Our plan is to have in place by May 2011, a Lancia/Chrysler integrated network comprising about 800 dealers and over 1,000 dealerships.”

Fiat’s head of sales, Lorenzo Sistino, said dealers will benefit from the new changes, which will provide them with a more-complete model line. Sistino predicts the Dodge Viper, Challenger and Charger will appeal to a niche audience in Europe and said current Chrysler-Jeep dealers will receive new, dedicated Jeep-only contracts. Jeep franchises will also be offered to existing Alfa Romeo, Fiat and Lancia dealers.

Lancia dealers who accept the new franchise agreement will have to expand their showrooms to accommodate Chrysler’s models. The new Lancia branded Chrysler products will include two new compact and mid-sized models which were designed to replace the PT Cruiser and Sebring, a newly designed 300C full-size sedan and the revamped Voyager full-size minivan. The Voyager will be marketed as the Town & Country minivan in the U.S.

Lancia’s model lineup will include the Delta compact model, Musa small minivan and Ypsilon subcompact model slated to launch in late 2011.

The Lancia/Chrysler dealer shakeup is part of Fiat-Chrysler CEO Sergio Marchionne’s five-year strategic plan. Marchionne aims to increase the combined annual European sales of Lancia and Chrysler vehicles to 300,000 units by 2014, up from 132,500 units sold in 2009.

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