To borrow a line from Mark Twain, the rumors surrounding the imminent demise of hundreds of Chrysler dealerships appear to have been greatly exaggerated.
Chrysler LLC Vice Chairman and President Jim Press tells dealers in a conference call today the auto maker does not know who, how or when a dealer reduction will occur. Nor do Chrysler executives know how many dealers will move forward with the new company once it emerges from bankruptcy.
“We do not have a finalized plan yet,” he says. “As soon as we are in a position to announce these activities, we will do that.”
Press says bankruptcy is “an unprecedented process with no roadmap. There will be a lot of unanswered questions, and things will change.”
Instead of bearing news of how the auto maker will streamline its dealer body, Chrysler executives were positive, saying sales this week were above forecasted levels.
Press also cites reports that indicate purchase intent increased 15% in the first week of Chrysler’s bankruptcy.
The goal, Press says, is “to sell down as much of the inventory as possible.” Chrysler will be ramping up its dealer incentives for aged inventory to help clear out that stock before the auto maker emerges from bankruptcy.
Chrysler Vice President Steven Landry also notes the auto maker paid 100% of its incentive and warranty payments this week and is in position to do so again next week. However, both Press and Landry allowed some wriggle room, saying the bankruptcy court controls the process.
“Anything we pay has to be approved by the court,” Landry says.
In court filings earlier this week, Chrysler said it would only pay incentives to those dealers it believes will have value to the acquiring company.
Landry also tells dealers parts are flowing and the company is watching inventory levels, ranging from 30-45-60 days, to make sure it has a backstop of needed parts for customers.
More than 2,500 Chrysler dealers have signed up with GMAC Financial this week for retail financing. Floorplan-0financing packages were mailed out Wednesday.
