PARIS - Chrysler has started to remodel its dealership network across France. The move comes a year after it cancelled contracts with 96 dealers.
Sixty-one have been reappointed but the 35 others have been discarded. Two years ago, Chrysler took the distribution of its cars in France back from importer Sonauto.
'We should have cancelled contracts as soon as we recaptured the distribution from Sonauto,' said Francois Pieri, Chrysler France general manager. 'We have lost a year, but there were not many other solutions.'
Seventeen dealers have already spent between FF3 million and FF10 million ($545,000-$1.8 million) each on new outlets. Chrysler plans a network of 102 dealerships by the middle of next year.
The break with Sonauto in 1997, together with a downturn in the market and the end of sales to rental fleets, caused a sharp decline in Chrysler's fortunes in France. Sales (including Jeep) fell from 12,060 units in 1996 to 8,030 last year. The sales forecast for this year is 8,000.
Taken separately, the impact on Jeep sales was not as dramatic. Registrations were 1,950 in 1996, 1,860 in 1997 and should reach 2,300 this year.
Pieri plans steady growth for Chrysler over the next three years. Total sales should reach about 10,000 in 1999, rising to 12,000 in 2000 and 15,000 in 2001.
Next year, Pieri predicts the following sales breakdown: Stratus and Neon (500 combined), 300M sedan (500), Jeep (2,300) and Voyager (6,500-7,000).
'It sounds like a reasonable target,' Pieri said. 'We will focus on the profitability of our network. We have broadened each dealer's territory and we want to raise the average annual sales volume from 95 to 145 new cars.'
Stephane Riehl, who owns four Chrysler outlets in the Paris area - including a new one in the city near the Champs Elysees - forecasts 500 sales in 1998. He aims to add 300 to that total next year.
'In the first stage, the sales rise will apply more to Jeep than to Chrysler models. We have not reached the level we should have with Jeep,' Pieri said. He believes Jeep should sell at least 3,000 units a year in France. The entry price for a three-door, 2.5-liter Cherokee has recently been reduced from FF167,000 to FF135,000.
The Neon has a low profile in France and Pieri has little confidence in the model. 'Today, I cannot refuse to sell Neons in France,' he said. 'But clearly I will not spend a dime on marketing the current Neon.'