Iowa Dealers Still Optimistic in Selling Chrysler Products

The sale of the Chrysler Group has aroused various reactions. There are some who thinks that it was the best solution like for instance Veteran Des Moines-area Dodge dealer Stew Hansen who thinks that the sale of the Auburn Hills-based company was an absolute necessity.

If there is that analysts and Chrysler dealers agreed on it’s the fact that the automaker must change quickly under its new owner, Cerberus Capital Management, to win back customers.

The new owner of Chrysler Group is Cerberus which is a private equity company in New York City. Cerberus has expressed its desire to revive the Chrysler Group the maker of Dodge including the Dodge Charger parts and Jeep vehicles. It has bought the automaker from Daimler for $7.4 billion. According to Doyle Jensen, Finance Manager for Adel Chrysler Dodge Jeep, "I think we need fresh blood in Chrysler."

At present Chrysler is trying to shift its product line to smaller more fuel-efficient models that carry smaller profit margins. Krebs said that Chrysler must lessen its dependence on sales of big vehicles such as pickup trucks and its larger sport utility vehicles. Krebs also added that Chrysler must learn to develop subcompacts that can compete with the likes of Honda Fit and the Nissan Versa. Krebs also thinks that Chrysler should negotiate with the United Auto Workers Union for a favorable contract especially one that would help reduce the company’s health care costs.

Chrysler has been able to roll out 10 new models last 2006 and will be releasing four more for this year plus an additional of four new models later in the year. Currently Chrysler has six vehicles that include small sporty utility vehicles that get more than 30 miles per gallon.

The concerns of local Chrysler dealers

On the part of the local car dealers their main concern is for Cerberus to have a better understanding of what their customers want. Jensen believes Daimler, renowned for its Mercedes-Benz brand bought Chrysler AG nine years ago hoping to enter the mainstream American car market but unfortunately it wasn’t prepared for the fierce competition that it has to face. Jensen said, “I think they’re tired of it.”

Hansen who is the general manager and former owner of Stew Hansen’s Dodge City, a Dodge and Jeep dealer said that in Germany, manufacturers "expect to put a car out there and the German people just buy it because it's a Mercedes or a Volkswagen or whatever." On the other hand here in United States, sales competition among automakers is aggressive, fueled by promotions, rebates, and low-cost-financing.

Hansen was very open about his dislike of Daimler’s German leadership. He thinks it’s too rigid and overbearing with its relations with Chrysler product dealers. He said, "It was their way or the highway is just the way it was."

Tim Westrum, the owner of Granger Motors stores in Granger and Perry has also given his views on the transfer of Chrysler’s ownership. He said that ownership by the private equity group will help promote long-term strategies that will strengthen the company.

But unlike Hansen, Westrum has a different opinion when it comes to Daimler; he said that the German automaker has helped Chrysler in ways such as improved quality. He observed that Daimler will still own nearly 20 percent of Chrysler, "It's not like they're washing their hands of the company. There are some good things that Daimler brings to the table such as engineering, product development and quality.”