FCA plan for Fiat brand dealers

[mryan55]

Some changes announced today are probably allowing some smaller Fiat and Fiat-Alfa Romeo stores to breathe a sigh of relief.

Automotive News has the details: http://www.autonews.com/article/2016...g-fiat-dealers

At the end of the day, unifying CDTJ and Fiat-Alfa operations under a single dealer code would have made the most sense from day one back in 2011. This may have also encouraged some existing dealers to jump onto the Fiat bandwagon five years ago.

No matter how positive the projections, it just didn't make sense for a Fiat Studio -- often located in a former used car building on the same property as the existing CDTJ dealer -- to have separate relationships with many of the vendors, of course all the expense of the Fiat studio.

Just think about it -- if you're in a small market where you may only be a sales group A or B store for CDJT -- but you take the plunge into Fiat, where all stores were initially A size stores. You are basically doubling your outlay to corporate every month...

Plus depending on how understanding your DMS, indirect lending partners, AutoTrader, and everyone else is -- you may be paying for duplication in almost every other department.

Here in the Indy market, neither Fiat store is an existing CDTJ point (only GLBC market I can think of where this is the case)... so they won't be able to take advantage of all of these changes, but needless to say it will be interesting to see if this reverses the trend of Fiat studios closing and/or being operated by non-existing FCA dealer groups.

The comments over on AN are pretty interesting!

[The StraightShooter]

FCA is in trouble. Everyone in Detroit knows it. Already seeing Ram double cabs getting dumped into rental fleets.

[steve_biegler]

http://www.autonews.com/article/2016...ews-firstshift

This mornings video.

Seems this was predicted right here on Dealership Forum a long long time ago!

[XDCX]

mryan55 - Thanks for creating this thread.

I'm still in the process of trying to get caught up and I'm looking forward to reading the AN story and comments.

[XDCX]

Originally Posted by XDCX

mryan55 - Thanks for creating this thread.

I'm still in the process of trying to get caught up and I'm looking forward to reading the AN story and comments.

I just had a chance to read the story you linked and walked away with a positive impression.

It would be interesting to know how these changes were sold to Marchionne. As I see it the concessions now offered by FCA are an admission that the stand-alone Fiat Dealer Network was a failure.

To Marchionne's credit, he has managed in the past to do a complete 180 without ever acknowledging the change of strategy or admitting failure. As I've pointed out in another thread on the forum, this is a character trait that Apple's Steve Jobs had too.

It was interesting, but not surprising, to read that two-thirds of the Fiat Dealers sell fewer than 10 units per month and less than half are profitable.

While I tend to be a critic of Auburn Hills I have to give them credit for making the best of a bad situation. The Fiat franchise is broken and if I were responsible for fixing it I'd take the exact same steps.

To the extent CJDR Dealers will now be able to use Fiat sales to hit their MSR and VGP number I wonder if there will actually be a trend where existing CJDR Dealers want to add a Fiat franchise?

Now I'm headed to AN to read the comments following the report - I'm sure they'll be entertaining.

[mryan55]

If I were a dual CDTJ and Fiat dealership I would definitely be excited by this news. The double overhead setup in place right now could have just continued.

You do bring up an interesting point about whether or not the newly-combined dealer codes will be able to count their Fiat sales toward VGP. I wouldn't be surprised if there is still separate Fiat VGP that needs to be hit to earn that money.

Otherwise there will be a lot of Fiat 500 service loaners out there!

[XDCX]

Originally Posted by mryan55

You do bring up an interesting point about whether or not the newly-combined dealer codes will be able to count their Fiat sales toward VGP. I wouldn't be surprised if there is still separate Fiat VGP that needs to be hit to earn that money.

Otherwise there will be a lot of Fiat 500 service loaners out there!

You make a great point about a separate Fiat VGP that would need to be added to the existing CJDR VGP.

That said, it VGP is supposed to be based partially on MSR and MSR is supposed to be based on the brand's new vehicle registrations in a particular market, I'm guessing the VGPs for Fiat stores must be pretty low.

[mryan55]

An article in Automotive News from Monday seems to shed a little more light on the situation... it looks like the CDTJ and Fiat objectives will likely be combined:

http://www.autonews.com/article/2016...r-fiat-dealers

Tim Kuniskis states:
Kuniskis' plan to revive Fiat would allow dealers to:

• Consolidate operations under a single dealer code, allowing them to avoid duplicate vendor contracts and share advertising costs.

• Apply Fiat sales toward monthly volume goals and incentives for their Chrysler-Jeep-Dodge-Ram outlets.

• Receive direct payments each month in the form of rent assistance if they continue to operate stand-alone Fiat dealerships.

• Receive additional incentives to sell Fiat vehicles.