Chrysler Dealers Sell, Despite Bankruptcy

April 30 didn’t start out looking like it would be a good sales day at Galeana Chrysler Jeep in Fort Myers, FL.

“There was nothing on the board when we opened,” says dealer Carl Galeana. “Then President Obama went on TV. Immediately afterwards, we sold six vehicles.”

Meanwhile, his Chrysler Jeep store in Columbia, SC, closed three deals right after the president spoke. “That was a great speech,” Galeana says.

Ironically, the main message of Obama’s TV address was Chrysler LLC was going into bankruptcy in an effort to resolve issues with hold-out bondholders.

But the president accentuated the positive by heralding the formation of a Chrysler-Fiat Auto Group alliance, promising Chrysler is not going out of business and vowing the government will back the auto maker and its warranties. It was heartening stuff to Chrysler-brand dealers who might otherwise have dreaded the prospects of trying to sell big-ticket products from a bankrupt company.

“He made it clear that Chrysler is here to stay, and the warranties will be protected,” Galeana says. “That helps.”

Galeana, speaking from Van Dyke Dodge, his home base in Warren, MI, says he won’t dwell on the bankruptcy issue in marketing messages.

Chrysler Carl Galeana says deals started rolling in after President Obama’s speech.

“There’s no need to,” he says. “There is enough information out there. Chrysler really has been in the news. We’re just going to market the business as usual and keep employees’ and customers’ spirits up by letting them know that Chrysler isn’t going anywhere

“This store has had so many ups and downs with talk of Chrysler going out of business, yet we’re still here and business is good,” he says. “April has been a great month. We’ll come out OK.” After Obama’s remarks, Team Hillsdale, a Chrysler dealership in Hillsdale, MI, saw a spike in leads, says owner Tom Vann.

“The speech was extraordinary,” he says. “It really calmed a lot of nerves. Afterwards, we received 16 leads, which never happens at the end of the month.

“Holy mackerel, we stayed open until 8 p.m. talking to clients,” he says. “And we got 12 more leads this morning. That’s a big deal.”

Vann says “bankruptcy is an ugly word to everybody.” But he and his sales staff have emphasized the positive.

“We’re telling people it’s a no-lose situation for consumers, that the government protection of Chrysler vehicles is extraordinary,” he says. “We say the bankruptcy is not to eliminate Chrysler but to allow it to come out more polished than it went in.”

Many customers are asking questions “not out of fear, but out of curiosity,” he says. “We’ve been through quite a few explanations about Chrysler before yesterday.”

Vann is formulating a marketing message aimed at instilling confidence in Chrysler in general and his dealership in particular.

“We’re building a marketing strategy,” he says. “I called our local radio station and they said, ‘We were just about to call you.’ I’m going to do a phone blast in three days with a positive message, combined with news of new incentives coming out.

“It would be naive to say I don’t have concerns, but my confidence grew enormously as we went through yesterday,” Vann says. “A lot of people have great faith in the product. It pings me when you hear other people say Chrysler doesn’t build vehicles that consumers want.”

In Reno, NV, Don Weir of Don Weir Reno Dodge, a 40-year-old dealership, issued a statement to customers reiterating Obama’s assurances that warranties would be backed and parts readily available.

“Consumers have no reason for concern,” Weir says. “Chrysler Dodge Jeep isn’t going anywhere, locally or nationally.”

Sid DeBoer, chairman and CEO of Lithia Motors, Bedford, OR-based dealership chain with several Chrysler brand stores, plays up the Chrysler-Fiat partnership.

The alliance will go a long way towards providing Americans with new fuel-efficient vehicles, he says. “We are also eagerly anticipating the introduction of Fiat’s lineup of vehicles to our markets.”

The best thing Chrysler-brand dealers can do is to work their customer databases, says Marty Bernstein, a former advertising executive who now is a freelance auto journalist.

“I’d advise them to call all their established customers and say, ‘Now is the time to buy,’” he says. “They should do everything to assuage fears.”

Dealers should rely on existing customers in order to get new ones, Bernstein says. “If you have a satisfied customer, ask for referrals and pay $100-$150 for ones that result in a sale.”

Dealers need to take a positive message to their communities, says Joseph Lescota, automotive marketing chairman at Northwood University in Midland, MI.

“Call schools and offer them a chance to have someone come in and explain just what bankruptcy is,” he says. “A lot of people really don’t know.

“Then dealers should sponsor public forums doing the same thing on the adult level. The public needs reassurance. Make it a grassroots effort, like a political campaign, because, in a sense, it is politics.”

Consumers are heavily influenced by positive news, says Lescota, a former dealership manager. “And we’re most heavily influenced by bad news. When people get that, they slam on the brakes. That’s why a positive message here is so vital.”

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