Chrysler eliminating about a quarter of its dealerships is getting a lot of press, but the press seems to be completely ignoring why Chrysler is doing this.
All day CNBC has been talking to Chrysler dealers and not once have I heard them say a word about why Chrysler is doing this.
The reason is simple. The Chrysler dealership network is a highly bloated, inefficient network compared to the Japanese competition.
Chrysler has 3,700 dealers across the country competing against each other for sales and has been talking for years about reducing the number of dealers. Chrysler is the fourth-largest-selling carmaker in the USA. By comparison, Toyota, which is the second-largest U.S. seller and also has three brands, has 1,400 dealers in the USA.
Chrysler said its dealers sold an average of 303 cars last year, compared with the 1,292 sold by each Toyota outlet
So Toyota sells more cars with fewer than half the number of dealers and apparently the numbers for the production of Honda dealers is similar to that of Toyota.