Chrysler Recovery Feels Real to Dealers

If patched-up Chrysler is on the mend these days, so are its dealers who have hung on through more than a few painful times.

“Being a Chrysler dealer now is so much better. It’s such a difference from three years ago,” says Lou Giordano, dealer owner of Croton Auto Park in Croton-on-the-Hudson, NY. 

The American auto maker flirted with death in 2009. Now, it is showing signs of good health with Sergio Marchionne, an Italian-Canadian, in charge.

Through May, Chrysler sales of 684,529 vehicles were up 32.4% from a year ago, according to WardsAuto data.

Giordano, a 22-year Chrysler dealer and chairman of the Greater New York Auto Dealers Assn., has been up and down for two decades with the brand. 

Things really got bad under Cerberus Management ownership, he says. The private-equity firm had grand plans until the recession hit, taking the auto industry and Chrysler in particular down with it. “The Cerberus vow to deal with product quality never happened.”

In 2009, Fiat CEO Marchionne took charge of Chrysler too when the Italian auto maker bought a stake in the U.S. car company. Now, Fiat is approaching outright ownership.

Some dealers fretted when Marchionne held up the launch of the redone Jeep Grand Cherokee after announcing the redesign in 2010. By 2011, dealers were still wondering where the new Grand Cherokee was.

In retrospect, they say it was worth the wait, because when the vehicle did hit the market it was of top quality.   

“Sergio wanted to get it right,” Giordano says, noting a CEO’s biggest fear is rolling out new products that belly flop on initial-quality issues.

Fighting for credibility, not to mention its life after bankruptcy, Chrysler could withstand no missteps, including a flawed product launch on an important vehicle.

Dealer Bill Golling of Golling Chrysler Jeep Dodge and Ram in Bloomfield Hills, MI, believes Chrysler has faced its product issues head-on.

“What the company has done (post-bankruptcy) is almost historic in this industry,” including paying off government loans, increasing sales and improving quality, he says.

“Within two years, they either overhauled or made major improvements to 16 core products – and major quality enhancements,” says Golling, a Chrysler dealer since 1983.

The best product move to date? Golling gives the nod to Jeep “for re-establishing the Grand in Grand Cherokee. It is everything a Jeep should be, plus has an outstanding interior.”

As the new Grand Cherokee receives praise, some of Chrysler’s past product issues resurface as government safety regulators say they are investigating gas tank fires in older-model Jeeps, including Grand Cherokees made between 1993 and 2004.

Chrysler contends the vehicles are safe and meet federal safety standards.

Golling also places a lot of faith in the all-new Dodge Dart compact car. 

“Dart gives us an extremely competitive entry in a large-volume market segment,” he says. “It’s also the first of many products being built on Fiat/Alfa Romeo architectures. It gives customers the best both Chrysler and Fiat have to offer.”

The Dart and the Chrysler 300 fullsize sedan are winners in WardsAuto’s 10 Best Interiors for 2012. The Chrysler 300 also was a winner in Ward’s 10 Best Engines competition.   

“If history is any judge, one of the toughest things to do is to maintain discipline in good times,” Golling says. Still, he’s confident in the new management team. 

“We need to remember, but not dwell on, where we came from, the sacrifices made and the opportunity we were given that has allowed us to move forward.”

But he cautions against becoming complacent.

In Omaha, NE, second-generation Chrysler dealer Mickey Anderson looks forward to even better days. His Baxter Chrysler Jeep Dodge group sold 5,085 units last year and expects to top that this year.

“It’s all been fantastic,” Anderson says of the turnaround. “The product is very well-received. The Chrysler group brand is strengthening and gaining respect on the strength of its product quality.

“Chrysler is back on people’s shopping lists. We continue to see customers come back.”

Some dealers think back to three years ago, a bleak period for Chrysler and its dealers. It was a time when Jim Press, former Chrysler president, desperately pushed dealers to take products they didn’t need.

“Their ship was really sinking, and Press was begging dealers who already had five to six months of product on the ground to take even more,” Giordano recalls.

That was then; this is now, he says. “Unless there’s a huge misstep, the Chrysler rebound should last.”