Bloomberg News

Chrysler Looks to Expand Sales Network in China, Manley Says

June 23, 2011

June 23 (Bloomberg) -- Chrysler Group LLC, the U.S. automaker operated by Fiat SpA, wants to expand its dealer network in China by 39 percent over the next two to three years.

The automaker has 127 dealerships covering about 60 percent of the market in China, Mike Manley, head of Chrysler’s international operations, said today. He wants to add 50 within two to three years and hopes to double the number in more than five years, he said.

“There are still big chunks of the market that we don’t have dealerships in,” Manley told reporters at a Chrysler event in Chelsea, Michigan. “We need to expand and grow.”

The effort is part of Chrysler’s drive to increase the automaker’s Chrysler and Jeep brands outside North America. Auburn Hills, Michigan-based Chrysler Group’s sales outside the continent in May rose 17 percent compared with the same month last year, Chrysler has said.

Jeep sales outside North America rose 50 percent in May, helped by completion of a dealer restructuring in Europe, Manley said. Europe sales should continue to grow this year now that new franchise contracts have been signed, he said.

“Advanced dealer orders on Grand Cherokee and Compass have been phenomenal,” he said. “I think we’re set for a good September.”

Fiat is buying the U.S. government’s remaining stake in Chrysler from the 2009 bailout that made Sergio Marchionne the chief executive officer of both automakers. Turin, Italy-based Fiat ’s holding will rise to 52 percent on a fully diluted basis after the transaction.

Compass SUV

Chrysler will begin selling the Compass sport-utility vehicle in China in the next two to three months, Manley said.

The company expects full-year sales of the Compass to reach 8,000 to 10,000 in China, he said. Chrysler wants to increase its China sales to 40,000 this year from 23,428 last year.

In September or October, Manley plans to travel to China to hold a meeting with potential investors in dealerships, he said.

Chrysler is expected to sell “a minimum” of 500,000 vehicles in the Asia-Pacific region by 2014, Marchionne said in a conference call on Jan. 27. Chrysler sales in the region rose to 39,688 last year, a 17 percent increase from 2009, Chrysler had previously said.

Fiat is in the process of building its first China factory in a joint venture with Guangzhou Automobile Group Co.

The key to Chrysler’s volume growth in China will be building vehicles locally, Manley said. The automaker is exploring working with Fiat and its joint-venture partner, he said.

“If we really want to be strong, we have to localize,” he said.

To contact the reporters on this story: Tim Higgins in Southfield, Michigan, at thiggins21@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net.


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