Chysler Service Contracts being sold via Internet brand sites

[ohiobuckeyes]

Chrysler is now going to be selling service contracts to OUR customers via brand sites. It was in a memo relesed yesterday. Chrysler will split the profit with their loyal servce contract dealerships. The contract will be sold @ MSRP. Called my rep today she told me that more info would be released later in the month. Also these are the customers that do not purchase at time of sale inside of the dealership. What is going wrong Chrysler is trying to take money out of the dealer pocket next thing we can not sell cars at the dealership.

[Ralph]

They sell almost 60% fleet now, CFC is retailing directly to our off lease customers, service contracts direct off the internet, so there's no great leap of Fiat brilliance to start retailing vehicles from the same brand sites. They've figured it out...it's easier to cater to a customer base they never have to see, hear or touch, (fleet and internet.) Awesome plan, they do the selling from the Ivory Towers of Turin and they let the schmucks who are dying in the field do the dirty work like argue with customers face to face over quality and warranty issues.

I'm being serious here believe it or not. Can you imagine how much easier it would be to control the sale of their products from corporate and let all the service issues be carrier out by the dealers fighting to conform to their SGS goals? Why not have 100% sold by Detroit and have a few service facilities come out of this in the end. Much easier to deal with business in that scenario. Lots of the OEM's have thought and talked about retailing with Ebay, Wal-Mart, etc.

[XDCX]

Thanks for starting the thread. I've been behind on my reading and hadn't heard about Chrysler's plans to sell Service Contracts on the Brand Sites.

I wonder if there are any other OEMs that are doing this?

I tend to agree with Ralph's point that if this trend continues the dealers will be reduced to being warranty repair centers controlled by the OEMs.

Where does it stop? Chrysler already has a program where they sell parts and accessories directly to the customer and now they're adding Service Contracts to the Brand Sites.

And let's not forget their past efforts to control the retail sales transaction. What percentage of Americans qualified for the "Preferred Customer" pricing offered to all Credit Union Members?

[The Fixer]

Gm and Ford have been offering thier service contracts on-line for a few years. Chrysler seems to be late to the game. At our Ford store the customers seem to research the service contract on line, but tend to come back to the dealership to purchase the contract. We know this because the customer comes in with a print out of the quote, it seems that they would rather make a major purchase face to face. Which is an easy sale for us, because the customer already knows what they want and their ready to pay the MSRP price.

[Noah]

Not only has Chrysler been doing this for years, but I called in to 'mystery shop' them last year. The representative that I spoke with was quick to offer a discount, well below the MSRP.

...how's that for good faith?!

[BRIANACAM]

Sub contracted.
and handled by Bud Co. in Highland Park Mi.

[XDCX]

Originally Posted by ohiobuckeyes

Chrysler is now going to be selling service contracts to OUR customers via brand sites. It was in a memo relesed yesterday. Chrysler will split the profit with their loyal servce contract dealerships. The contract will be sold @ MSRP. Called my rep today she told me that more info would be released later in the month. Also these are the customers that do not purchase at time of sale inside of the dealership. What is going wrong Chrysler is trying to take money out of the dealer pocket next thing we can not sell cars at the dealership.

Where did you see the memo, was it on DealerConnect or somewhere else?

Also, I just checked the Jeep Brand Site and noticed the Service Contracts Home Page now has an option where customers can get a price quote by submitting their VIN Number and e-mail address. Is this the change the memo addressed or is it something more involved?

[ohiobuckeyes]

Originally Posted by XDCX

Where did you see the memo, was it on DealerConnect or somewhere else?

Also, I just checked the Jeep Brand Site and noticed the Service Contracts Home Page now has an option where customers can get a price quote by submitting their VIN Number and e-mail address. Is this the change the memo addressed or is it something more involved?

D MAIL > Subject:

Chrysler Group Service Contracts - 2009 Accomplishments & 2010 Projects

March 1, 2010

Here is the section of the memo that refers to the On Line Selling....

This month we will introduce another revenue and loyalty-generating program for Chrysler Group dealers.
Beginning March 8th, our marketing efforts will improve our current online selling capabilities. Customers that
did not purchase a Chrysler Group Service Contract at the time of vehicle sale will have an opportunity to
purchase online through one of the Chrysler Group branded websites. All contracts will be offered at full
MSRP and the gross profits will be shared with our loyal dealers (based on where the customer originally
purchased their vehicle). Dealers will receive up to half of the gross profit earned, automatically. Watch for
the “Official” program rules along with the Gross Profit Sharing Matrix as we approach the website launch
date.

[XDCX]

Originally Posted by ohiobuckeyes

Here is the section of the memo that refers to the On Line Selling....

Thanks for the heads-up, I never read that D-mail. (On a side note, I hate it when you open a D-mail and it requires you to open a PDF file to read the message. It appears the only reason for the PDF is so the dealers can see the CSC logo and the signatures at the bottom of the letter. )

[XDCX]

I just heard the program details are available on DealerConnect.

Is anyone surprised that there's a stair-step matrix which includes 0% payments for some dealers? It's a slippery slope....