Local Chrysler boss outlines the state of play

Chrysler's Australian division is financially sound and looking forward to continued growth, according to the company's local MD, Gerry Jenkins. At a press conference earlier today, Jenkins informed the press that the financial problems faced by the parent company in the US will have little to no effect on the Australian arm and its dealer network.

"Number one message is: Chrysler Australia is alive, well, in business -- and we're excited about the prospects for the future," he said.

"From a broader scale, Chrysler is alive, in business -- and also has a new partner in Fiat. We're quite excited about the prospects that that's going to lead to."

Jenkins stressed that Chrysler Australia was in good shape and the dealer network is fully behind the local office following talks between management here and the retailers. If there's one potential problem Chrysler Australia faces, it's the possible short supply of popular product lines.

"The US plants will be down for anywhere between 30 to 60 days," Jenkins explained, "and not all of our vehicles are sourced from the US."

"Some of our important vehicles are sourced through the US -- such as Cherokee, Nitro and Patriot for example. That will affect the supply of those vehicles over the short term, but we still have roughly 4000 vehicles, both in [our] stock and dealer stock.

"That supply will last us at least over the next five or six months -- albeit it may not be the perfect mix. We would certainly love to have more Nitros in stock today, because it's been an absolute runaway hit for us."

The dealer group has responded positively to the news, says Jenkins.

"In a sense it's taken the monkey off the back and all our dealers are quite happy to be in this position today -- to know clearly where's Chrysler going and financially, are we going to be there in the future? There is a great deal of comfort in knowing what they know today.

"When [the dealers] know that the future's bright, they'll continue to invest and support us -- and that's really critical in this scenario. Most of the dealers that I've spoken with are quite enthusiastic about what Fiat may lead to... the possibility of integrating the technology into our future product, the possibility of integrating some of their platforms into our line-up is quite exciting to our dealers."

Unlike dealers in the US, now forced to place their finance business through GMAC -- a company with a chequered past here in Australia recently -- Chrysler's local dealers have shored up their finance through other institutions; among them Daimler Financial, St George and Esanda.

All Chrysler's Aussie dealers, with one Brisbane-based exception, are multi-franchise outlets for whom Chrysler is not the sole revenue stream, but the Chrysler portfolio is paying dividends for them anyway. In talks with Jenkins, many of the dealer principals have expressed the opinion that engineering cross-pollination from Fiat will be a good outcome for Chrysler.

As for the local Fiat distribution, Jenkins says that he expects discussions regarding wholesale channels should take place sometime within the next 12 months.

"Here in Australia, I believe we outsell Fiat by two to one. Fiat is operated through a distributorship, Ateco, and right now -- at this point -- there's no intention of taking over the wholesale of Fiat product in Australia. But we look forward to seeing if we could cooperate on several issues going forward. Those discussions are yet to be had."

Jenkins says that harmonising wholesale and retail logistics across the alliance will be pursued on the basis of greatest benefit. Therefore, the US, Latin America and Europe will be the priority, rather than Asia/Pacific and other regions.

For further information, you can read more about the Chrysler bankruptcy proceedings and the alliance with Fiat here and here.

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