Chrysler Group has begun warning some of its weakest dealers that it may attempt to shut them down if they don't improve sales within six months, The Wall Street Journal reported on Wednesday.
The move, a sign the auto maker is moving more aggressively to cull its network of retail outlets, also marks an effort by Cerberus Capital Management LP, according to the report.
Cerberus, which is completing its deal to buy a controlling stake in Chrysler from DaimlerChrysler AG, has discussed in the past several months the need to slash dealer ranks with Chrysler executives as well as some of Chrysler's top dealers, said the report.
GM has about 6,900 dealers, Ford has 4,200 and Chrysler 3,700. But years of declining market share have left the three Detroit giants with a surfeit of dealers -- a competitive disadvantage.
Too many dealers can lead to undercutting of prices and squeezing of the more-successful dealers.
Source: Xinhua
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