This year’s NADA convention provided an opportunity for the new management of Chrysler to speak directly to their dealer base and the rest of the used car industry.  The management team, implemented by Fiat, laid out their plans for the upcoming year.

According to the Associated Press “Chrysler plans to have 16 new or significantly redone models by the end of this year. The company has high hopes for a new lighter, and more efficient, Jeep Grand Cherokee that is coming around June. A redone Chrysler 300 and Charger, the new Fiat 500 minicar and a new Dodge sport utility vehicle are expected later in the year.”

The new Chrysler team also projected their 2010 sales at “just under 1.2 million.”  The company also stated that with their cash on hand and sales of “just under 1.2 million”, they will be able to turn a profit for 2010.

All of these things are very positive for Chrysler/Fiat and the Chrysler dealer base.  But…

Several dealers are still very concerned about their sales in the near future.  It will take some time for the new Chrysler/Fiat models to appear, which leaves dealers with inventory that is less than desirable. Chrysler dealerships will continue to struggle throughout 2010.  They will continue to cut costs and make sacrifices, in order to buy time until the new models arrive.

Fiat/Chrysler will obviously be instrumental with helping their dealerships over the course of the next year.  The tone set by the manufacturer’s advertising presence will be crucial during this transitional time.  However, according to some Chrysler dealers interviewed at NADA, they are skeptical of the recent ad campaigns that deal with brand identity. 

I agree with these dealers.  There is a time to build brand identity.  Nine months before you replace most of your models with completely different models, is not the right time.  This tells the customer that “we love our designs soooooo much, we are completely changing them.”  The sentiment is correct, just a bit early. 

Right now, Chrysler dealerships need help selling the models they have.  Now is the time to be pushing price.  Let’s face it, Chrysler dealers aren’t going to be able to hold much margin on their older models anyway.   Chrysler needs to embrace this time of “out with the old, in with the new.”  Every piece of advertising that comes out of Fiat/Chrysler needs to convey that Americans will never get a better deal on a Chrysler than they will right now.  Chrysler dealerships need to clear their lots and Americans have become very price sensitive during our ongoing recession.  The timing has never been better for a price leader campaign.

Chrysler dealerships need assistance in selling more service and more used cars.  To help their dealer base, Fiat/Chrysler should focus some of their advertising dollars toward these initiatives.   For example, advertising that discusses “certified used vehicles” should help drive used traffic.

It seems that Chrysler is on a positive track.  It also appears that 2010 is going to be as challenging as 2009 and 2008 for Chrysler dealerships.  These are franchises that have continuously suffered due to extremely poor business decisions made at the manufacturing level, especially during the Cerberus years.  If this truly is a new Chrysler, with truly different thinking and possibilities, then it is time for the new management of Fiat/Chrysler to do whatever is necessary to help their dealer base in 2010. 

The dealers in the room at NADA feel confident that the new management team at Fiat/Chrysler is currently on the right track.  These dealers are on the front line, and their positivity speaks volumes to me.  For their sake, I hope they are correct.

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