Fiat eyes Toledo to sell vehicles

8/28/2010

Fiat SpA is targeting Toledo as one of 119 markets nationwide where it wants to sell Fiat vehicles, but whether it makes sense for local Chrysler Group LLC dealers to invest money into opening a franchise for the small-car brand remains to be seen.

Both Charlie's Dodge Chrysler Jeep Inc. and Grogan's Towne Chrysler Jeep Dodge were invited to a meeting on Monday to discuss Fiat's plans, said Denny Amrhein, managing partner of both dealerships.

No one from Yark Automotive Group, another large, local Chrysler dealer, could be reached for comment Friday.

While Charlie's and Grogan's Towne officials are interested in selling Fiats, they want to know how much they will have to spend and other details before deciding whether to submit a proposal by Fiat's Sept. 22 deadline, Mr. Amrhein said. Toledo-area Fiat dealerships may sell only 20 cars a month, compared to possibly hundreds for domestic brands, he said.

"It's something you really got to look at," Mr. Amrhein said. "If it's too much money, I'm not going to do it."

Chrysler Group LLC is controlled by Fiat.

About 600 Chrysler dealers were invited to attend the meeting in Detroit to discuss positioning of the Fiat brand, its product plan, projected volumes, and retail network configuration.

Dealers will be chosen in early October by Fiat, and the automaker plans to start selling the Fiat 500 this year, according to Chrysler.

Fiat is requiring dealers to initially have separate display areas for the brand and to eventually have a separate dealership.

Invitations were sent to Chrysler dealers in areas where Fiat sees a future for the brand, said automaker spokesman Ariel Gavilan, who declined to identify invited dealerships.

Detroit is the only area in Michigan where Fiat dealerships are being considered. In Ohio, Cincinnati, Columbus, Dayton, Cleveland, Akron, and Toledo are being considered.

It's difficult to judge whether the Toledo area could sustain a Fiat dealership, because it is unknown which models will be sold in the United States, said industry analyst Paul Melville, a partner with Grant Thornton LLP in Southfield, Mich.

"Until you know that, it's a bit of a crystal-ball gazing, really," Mr. Melville said. "If I was a dealer, the question I'd be asking is, 'What's the investment and what's the payback?'"

Fiat, meanwhile, likely will want to see how well the Fiat brand sells before bringing the Alfa Romeo brand to the United States, he said. Fiat has said sales of that brand may occur in 2012 in the United States.

Treadway Chrysler Dodge Jeep in Findlay would like to be considered for a Fiat dealership, but it's unlikely the brand will be sold outside of metro areas, said Nelson Treadway, dealership president.

"I just think they're cautious of overdealering franchises right now," Mr. Treadway said.

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.