Free Chrysler Open Point in Phoenix - Just buy the land....

[XDCX]

I noticed an interesting ad in the Classified section of Automotive News offering a Chrysler/Jeep/Dodge/Ram Open Point in Phoenix for no Blue Sky - all you have to do is buy the land.

Here's the verbiage from the ad:

Arizona - Phoenix MSA - Approved Chry/Jeep/Dodge new point pkg - NO BLUE SKY for LOI - Purchase land site at current appraised value - Includes valuable Econ Dev Agreement - call for details - Presidio Real Estate Advisors - 480-621-7000

A few things about the offer caused me to ponder:

First, I wonder who was initially approved for a CJDR point and now wants to walk away?

Second, I wonder why Auburn Hills isn't snapping up this deal? Based on Chrysler's new store in Los Angeles I thought they wanted to "experiment" in the retail arena.

Third, after killing off 789 dealers why does Auburn Hills see the need to add a new point in Phoenix? I'm pretty familiar with this market and adding a new point would seem to be taking "Project Alpha" a step backwards.

[XDCX]

I thought of this thread when I was making my Road Trip to Lake Havasu.

I was driving on Highway 303 and saw a sign for an Auto Mall that was still under development. The only franchises that were currently open were a Chevrolet store and a KIA store.

When I saw the sign indicating the Auto Mall was going to include a full-line Chrysler, Jeep, Dodge store I knew this had to be the open point/LOI that was listed for sale in Automotive News.

Here's a photo of the sign along Highway 303:

It will be interesting to see how long it takes for the developer to find a buyer. In my opinion it's hard to start a new dealership in a new Auto Mall when you don't have an existing customer base or any natural traffic.

I wonder if the person/firm who owns the rights to the Toyota, Ford, Buick/GMC and Nissan stores has any intention of starting construction soon?

[SHACOS]

I'm not sure I'd want to be in an auto mall with my CJDR dealership next to all my competition either. A Kia Optima next to a Chrysler 200 just puts the 200 to shame.

[XDCX]

Originally Posted by SHACOS

I'm not sure I'd want to be in an auto mall with my CJDR dealership next to all my competition either. A Kia Optima next to a Chrysler 200 just puts the 200 to shame.

While I'll concede the Chrysler 200 isn't the most competitive vehicle in its segment I'll also argue there are a lot of Chrysler dealers who have managed to survive Marchionne's "hibernation" and some are making some pretty decent money.

To me, the deal breaker with this location is the risk a dealer would have to take hoping that the other franchises will open their stores and create traffic for the Auto Mall. The location could be a gold mine in five years if the housing market has recovered and the area experiences a new wave of growth.

That said, I bet the dealer who invests at that location will have to carry the store for a period of time when it's running in the red and spending money to lose money is not an attractive proposition.

[XDCX]

I made a quick trip to Havasu and noticed there was a new dealership under construction and it appears that Larry H. Miller has taken advantage of this deal.

Starting a new dealership in a relatively new Auto Mall which has minimal natural traffic certainly has its risks. Larry H. Miller is a mega-dealer in the Southwest and I'm sure the dealer group has the capital to fund the dealership until it becomes profitable.