Dealer Dodges 3 Bullets

WALLED LAKE, MI – In the last year, Shuman Motor Sales has dodged three bullets as a Chrysler-Jeep dealership. But owner Bob Shuman is looking forward to a “major upturn,” especially when the Fiat 500 subcompact car goes on sale in 2010.

Shuman headed off a proposed new Chrysler-Dodge-Jeep store five miles (8 km) away. Then he ducked the fate met by 789 other Chrysler-brand colleagues who received dealership elimination notices as part of a Chrysler Group LLC reduction plan.

“As if that weren't bad enough, the Chrysler bankruptcy raised a stigma on our sales image that could have been a disaster,” Shuman says. “But it didn't happen, and our run rate in the first half kept close to our MSR (minimum sales responsibility) of 100 new units a month.”

Interviewed in his renovated dealership in this Detroit suburb, Shuman says the three Chrysler brands – Chrysler, Dodge and Jeep – have shown great resilience in the face of the dealership cuts, plant closings and management realignment.

Italian auto maker Fiat SpA acquired a 20% stake in Chrysler after it emerged from bankruptcy in June. Shuman speaks highly of Chrysler’s new CEO Sergio Marchionne, as well as Deputy CEO James Press, who is leaving the company by the end of the year.

“I really feel bad for the dealers that got axed,” says Shuman, whose grandfather Thurlo Shuman, started the dealership as a Ford store in 1954. “They are good dealers and loyal supporters of Chrysler through thick and thin, as I am.”

Fiat entering the picture offers “a fourth brand to be sold from our existing dealerships, and not as a separate franchise,” Shuman says. He anticipates a market for the small Fiat 500 in the U.S., as well as for potential offerings from Fiat’s Alfa Romeo brand.

Chrysler Financial merged into GMAC, which took over Chrysler dealer floorplanning and auto financing “without a hiccup,” Shuman says.

Despite Chrysler’s troubles, dealer Bob Shuman optimistic.

He cautiously does lease deals on new vehicles, “but that has been our policy all along.” Chrysler Financial had stopped leasing last year.

“GMAC is not hellbent on offering leasing deals to Chrysler dealers, but I think they'll change sooner than later,” Shuman says.

Offering preferred lease rates for repeat customers is a good idea. But Shuman frowns on 72-month leases, just as he balks at subprime deals.

“Seventy-two months is too long,” he says. “Folks, especially the younger ones, want to change their cars more often. That hasn't been affected by the downturn in the economy.”

The Shuman store sold more than 650 new units in first-half 2009. “Our service rate has been steady since we expanded our service department to 20 stalls,” Shuman says. “And our used-car sales rate has grown.”

He employs 45 people. Eleven are in new-vehicle sales and 10 in used.

Shuman stresses the durability of customer relationships as a factor in his staving off Chrysler's plans for that new Chrysler-Dodge-Jeep store in the nearby city of Milford. Shuman continues to pursue a Dodge franchise to round out his brand lineup. “Dodge would be a perfect fit,” he says.

The Chrysler Town & Country minivan is his No.1 seller, but the Sebring sedan “is an underrated value, as is the PT Cruiser,” he says. “Chrysler still offers a top-notch lineup, and I'm optimistic as all get out about our future.”