According to the Detroit News, the Cerberus-owned automaker has closed 196 dealerships nationwide and has added 70 new concept stores called "Genesis" stores. These stores sellthem under one roof.
Most of the “Genesis Stores” were created by combining Chrysler-Jeep-Dodge dealerships.
At the end of May, Chrysler had 3,488 dealerships and 58 percent of them were Genesis Stores. That’s up from 52 percent last year.
Our take? Chrysler as well as its American rivals have more dealerships and overlapping models than the Asian companies. That causes lower sale prices and cuts profits as dealers undercut each other selling similar product to attract customers. It is believed that by having all three brands under one roof, sales will increase as well as profits because the undercutting will be eliminated. The profits can then go into improving showrooms and service areas which help generate more revenue.
Consolidating dealerships also has the benefit of cutting mortgage payments on two buildings. A Chrysler exec said that a consolidated dealership has increased sales of 25 percent compared to 30 percent over two locations.