Project Genesis Update

[XDCX]

There's a news report in the Detroit Free Press that updates Chrysler's progress with Project Genesis.

Here's a link to the news report: http://www.freep.com/apps/pbcs.dll/a...#pluckcomments

According to the report there are currently over 100 dealership consolidation negotiations going on across the country.

As before, 100% of the consolidation effort is being directed at metro locations and Chrysler indicates that their goal is to increase dealership sales to 1,000+ units per location.

Dealers in rural areas report that there are no consolidation efforts in their markets and Chrysler has actually blocked some deals citing poor sales performance.

Chrysler cites Boston as an example of their efforts - the number of Chrysler, Jeep and Dodge dealers in the metro market has dropped from 23 to 14 in just the past six months. Chrysler's ultimate goal for the market is a total of 10 dealers.

[XDCX]

In an effort to facilitate the Project Genesis Program and to ensure that there is sufficient service capacity for a given market, Chrysler has approved Stand Alone Service Centers on a limited basis.

Here's a link to the news report: http://www.autoweek.com/apps/pbcs.dl.../65155408/1024

At the current time there are fewer than 10 facilities that may be approved as Stand Alone Service Centers. It appears that the option is used in very limited circumstances where the acquiring dealership has insufficient stall capacity and the selling dealer want to retain a service and parts operation.

It will be interesting to see if this option is used to encourage future dealership consolidation negotiations.

[XDCX]

I received an e-mail from a Dealer Principal that indicated that his Business Center recently held a Dealer Meeting where Project Genesis was discussed.

The Dealer indicated that there were several references to Toyota and that it appears Chrysler will be using them as the distribution benchmark.

The Dealer reported that he had an individual meeting with Chrysler personnel to review his situation. The meeting was attended by local Business Center personnel - no Detroit people attended the individual meeting.

He was shown a map of his market area with several circles showing where Chrysler wanted to have dealerships - his location was not circled. The Chrysler representatives indicated that he could stay a single point dealership "forever" but they would not allow him to add to his existing franchise.

He asked about his ability to survive as a single point store with a limited product line-up. He was advised that product plans are still unknown but that Chrysler is committed to eliminating several nameplates.

[XDCX]

I received an additional update from a Dealer Principal that indicates that Chrysler has denied the request of a local dealership to consolidate two stores. It appears that they would rather have both stores operate as stand-alone facilities or close down?

I'm not sure why Chrysler would deny a consolidation request? Perhaps they're hoping that the Dealer will just close both stores and make their Genesis plans easier for that market?