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Dealers vs Mopar: Who’s right and wrong? What to do next?
Feb 4, 2025
Stellantis (FCA US) (former Chrysler) seems to be at odds with its US dealer council, which thinks it’s hurting the value of Jeep, Dodge, Ram, and Chrysler. Who’s right and wrong? Could it be both? And, most important, how do we fix it? We provide it all to you, with 30 years’ experience of organizational consulting *and* covering Chrysler/DCX/FCA/STLA!
View Video Transcript
0:01
it's an interesting thing that's been
0:03
going on for the last couple of days the
0:05
head of the American dealer Network
0:07
wrote an open letter uh Automotive news
0:11
published portions of it and he accused
0:13
Carlos Tavaris the CEO of stantis of
0:17
making short-sighted decisions which
0:19
devalued the brands it's important here
0:21
to realize that devaluing the brands is
0:24
not something new what the dealership
0:27
people are talking about is being late
0:29
with new product having a great big
0:31
empty hole where the Cherokee should be
0:32
because the Cherokee is really the heart
0:35
of the market the midsized crossover as
0:38
you might guess dealers are not happy
0:40
about this and they're not happy with
0:42
all the price increases and of course
0:45
you know what we saw during the car
0:46
shortages was that you went down to your
0:49
friendly Hyundai dealer or your Kia
0:51
dealer or whatever and they would t$
0:52
four or $5,000 on to the list price of
0:54
every car and santis you know you can't
0:58
really blame them for jacking up prices
1:00
so that instead of the dealer making
1:02
unheard of profits they were making huge
1:05
profits and they could in theory put
1:07
that into new product and upgrades to
1:09
the plants which they've done they've
1:11
got new product coming out it's not here
1:13
yet but it is coming out and the plants
1:15
have gotten a lot of upgrades so let's
1:17
talk about devaluing the brands well one
1:20
way that they devalue them is they keep
1:22
referring to them as Brands and you know
1:25
for the average buyer you don't want to
1:27
have your nose rubbed into the fact that
1:29
you're paying a premium price for what
1:31
is basically a name plate something to
1:33
throw away when you're done with it not
1:35
too many people really want to think of
1:37
something that they're plunking down $3
1:39
to $100,000 on as a brand and yet we see
1:44
in the price releases they refer to it
1:46
even in the headlines the Dodge brand
1:48
announces as opposed to dodge announces
1:50
like any normal person would say or the
1:53
Jeep brand announces or the Ram brand
1:55
and what's kind of interesting about
1:56
that is you never hear about the
1:57
Mercedes brand do you or the Toyota
1:59
brand or the Lexus brand because they're
2:02
smart enough not to do nonsense like
2:04
that maintain the illusion keep your
2:07
luxury Mark and your mainstream brand
2:10
separate you know if Jeep is supposed to
2:13
be a premium Mark and I won't use the
2:15
word brand because Mark is a premium
2:18
word for brand uh if the Jeep mark is
2:22
really premium and you're paying extra
2:24
for it it damn well ought to be referred
2:26
to as just plain Jeep not as the Jeep
2:29
brand which indicates it's just some a
2:31
name plate that we slap onto the back of
2:33
the vehicle we don't we could change the
2:35
engineering a little bit but we'll
2:37
change the visuals instead and that's
2:39
not where Jeep needs to be more than
2:42
that the prices went up and then demand
2:46
went down and the prices didn't really
2:48
come back down across the board some
2:49
prices did some didn't and they're still
2:51
playing stupid games with things like
2:54
would you like this car in any color
2:55
other than white well then you'll have
2:56
to pay $600 different color fee and
3:00
that's not the way to do it when sales
3:01
start to drop you do something and you
3:04
don't try to trick the customer you
3:06
don't have a
3:07
$2,000 uh shipping fee for example it's
3:10
a crazy high destination charge for
3:12
vehicles made on this continent to be
3:14
delivered to you to pay $2,000 seems a
3:17
little pricey when Toyota and Honda
3:20
charge less you can buy a Mazda and have
3:23
it shipped in from Japan and you'll pay
3:24
hundreds of dollars less for the
3:26
destination charge anyway so we've got
3:29
this fight going on cenus by the way
3:31
they replied to the dealers basically
3:33
saying uh we are working with you we're
3:35
trying to work with you please don't
3:37
drag this out in public that's not a
3:39
good way to do things and they're right
3:41
you can understand some frustration on
3:43
the dealers part but the dealers let's
3:45
remember are the lowest rank dealers in
3:48
the country and have been quite
3:49
consistently for years on the other hand
3:51
the dealers can point their fingers back
3:53
at santis and say what's up with not
3:56
getting us Parts on time and with
3:58
requiring us you you know you're
4:00
somebody to come down and verify large
4:02
repairs and having this process where we
4:04
don't know if we'll be paid back or not
4:07
and the company itself by cutting back
4:09
on diagnostic time and all that you know
4:12
making warranty repairs harder to get
4:14
paid back for at the dealer level has
4:16
not been doing themselves any favors if
4:18
you're paying extra to get a premium
4:20
product then you should probably get the
4:23
warranty repair is done in a premium
4:25
product way not sitting around for a
4:27
week while your car is at the dealership
4:29
waiting for his own rep to to ensure
4:32
that the repair is really needed so
4:34
there's lot to
4:36
unpack one of the problems is that the
4:39
marks in the US have been priced higher
4:42
as premium products but Stan's main bent
4:47
is on cost savings there there's this
4:49
odd thing where if you watch the pennies
4:51
too closely it starts to cost you in
4:53
dollars yes there are dealers who cheat
4:57
there are many dealers who cheat there
4:58
are some dealers who cheat a lot but you
5:01
can't punish the good dealers who don't
5:03
cheat at the same time and in the past
5:05
you had dealerships with different
5:06
levels of trust and I'm sure that they
5:09
still do but the ones who are most
5:11
trusted pretty much got a um all clear
5:14
on most things and that seems to be
5:17
going away now anyway do the dealers
5:19
have a point with regard to devaluing
5:22
Brands probably yes and no on the one
5:26
hand it's the dealers who are really
5:29
responsible
5:30
for a lot of this because the customer
5:32
satisfaction in Chrysler Dodge Street
5:34
Ram dealers has been lower than that
5:37
with other companies for quite some time
5:41
on the other hand you've got stantis
5:43
pinching pennies with their profit
5:45
margins on selling new cars raising the
5:48
prices uh to the dealers so that they
5:51
can't uh let old inventory go very
5:53
easily without losing money on it and
5:56
going to the dealers and P pinching
5:59
pennies on the service and on the
6:01
diagnostic time and making extra sure
6:04
that every repair is really really C for
6:07
and Justified and that they can't say no
6:09
to the
6:10
customer this is really a problem
6:13
because that's what causes some of the
6:16
dealers to get kind of desperate for the
6:19
money for the profits and then to cut
6:22
their
6:22
service or basically do the usual fni
6:27
scams and all the other scams that car
6:28
dealers are so good for I have to talk
6:30
to the manager oh I'm sorry we can't
6:33
give you back your keys unless you make
6:34
a deal what will it take to make you buy
6:36
this car today we'll give you back your
6:38
keys after you agree to tell us and that
6:41
sort of thing not to mention uh here's a
6:44
great deal on insurance here here's a
6:46
great deal 8% interest on financing yay
6:49
and here comes the hidden fees so
6:52
there's a lot of stuff that dealers can
6:54
do to make up for the missing profits
6:58
from
6:59
the other side and that's a problem too
7:03
it's best if the dealers feel confident
7:05
in their ability to make money over time
7:07
it's best if the company doesn't Penny
7:10
pinch where it shouldn't be penny
7:11
pinching I'm hoping that they resolve
7:13
all of this what we've needed and
7:16
haven't gotten for pretty much most of
7:19
the time that Fiat has been in charge of
7:21
chry N stantis is a way to make sure
7:24
that dealer quality and customer
7:26
satisfaction with dealers Rises one of
7:29
the people from Fiat Chrysler who used
7:31
to run the
7:32
dealerships Petro gorlier was really
7:35
great with the carrot but I don't think
7:38
he used the stick much now it seems that
7:41
they use the stick but I don't see much
7:42
of a carrot what we really need is an
7:46
integrated system which gives dealers
7:49
the tools that they need to clean up
7:51
their act and to increase customer
7:53
satisfaction and to increase customer
7:57
loyalty and to play fewer games with the
7:59
customer and at the same time an
8:02
assurance that they will make money more
8:04
money if they do so and that they will
8:06
make less money if they don't the old
8:09
five-star program I could I plan to do a
8:11
video on it later but the old five-star
8:13
program was great with the carrot and it
8:16
had no stick what we need is carrot and
8:19
stick and support for dealers who are
8:22
trying to change their way because just
8:25
telling them do better isn't enough
8:27
either
8:29
anyway this is motel's Dave and I'll be
8:31
back soon
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