Chrysler Denies Seeking Dealer Margin Cuts

NEWARK, DE - Chrysler Group denies reports it's seeking to reduce dealer margins in order to improve profits. The auto maker says its dealers are a crucial part of its turnaround plan.

“None of our top management thinks dealer margins are too high,” says Chrysler CEO Dieter Zetsche during ceremonies here for the production launch of the Dodge Durango SUV.

He says the reports are unfounded, adding that a few disgruntled dealers may be trying to start the rumors.

“We have 4,500 dealers, so probably you can get any kind of quote from some of them,” he says. “But, we are very much aware that our dealers have to be profitable in order to invest and support us.”

An onslaught of new products and Chrysler's attempts to take its brand upscale will require dealer support and help to improve the value of their franchises, Zetsche adds.

“In the long run, we want to be an attractive franchise, and we want to work together with our dealers to represent the most attractive and efficient sales distribution channel possible.”

That doesn't mean Chrysler will not try to influence how dealers spend their profits on advertising or in other areas, Zetsche adds.

“We might discuss with them the way to spend that money, but not with the intention to make them less profitable,” he says.