Chrysler dealerships outside N America intact for now

CHRYSLER BUILDING: New York landmark a symbol of better times for US automaker. (Getty Images)

US automaker Chrysler said on Tuesday its organisation outside North America would not be affected by a bankruptcy filing at home or its planned alliance with Fiat SpA.

Chrysler filed for bankruptcy last week and plans to sell its best assets to a new company managed by Italy's Fiat, although a group of investment funds is seeking to block these plans.

"Our organisation outside the US stays intact. It doesn't go through a Chapter 11 or anything comparable," Thomas Hausch, Chrysler's vice-president of international sales, told reporters in Dubai.

"We have no plans to change any distributor contracts or do any major network changes," he said.

Chrysler's US car dealership network is on the verge of collapse, a bankruptcy court heard this week, as hundreds of dealerships close their doors and uncertainty about the automaker's future drives consumers away.

Chrysler, which operates almost 3,800 dealerships in North America, has about 1,550 dealers in the rest of the world.

Plans for an alliance with Fiat do not include any changes to Chrysler's dealership network outside North America, but could pave the way into new markets for both the Italian and the US carmaker, Hausch said.

"The Fiat alliance might allow us to make additions in some of the white spots," he added.

Hausch said Chrysler was very likely to halt production in the United States, Canada and Mexico in the next 30 to 60 days, but would continue manufacturing in locations including Egypt and Venezuela.

The production halt would not have an immediate affect on the supply of spare parts to dealerships around the world, he said.

"If this process takes 30 to 60 days, there is no shortage of spare parts we have to worry about," he said, adding that completed cars would also be delivered in the coming months.

"There is at least 2 to 3 months (of stock in the pipeline), but then we also have the ability to ship between countries."

The Middle East had about four months' worth of completed cars in the pipeline, the region's managing director said.

"We have something in the order of four months inventory on hand with additional cars on the way," Trent Barcroft said.

Chrysler's Middle East vehicle sales fell 27 percent in the first quarter to 2,500, said Muhammad Aslam, the automaker's senior manager of sales operations in the region.

Middle East car sales are down about a quarter from last year, Aslam said. Chrysler has about 19 distributors in the region and commands about 1.5 percent market share, he said.

The carmaker's bankruptcy, one of the biggest US company bankruptcies ever, is widely seen as almost a dry run for a potential reorganisation of General Motors Corp.

The top US automaker, which like Chrysler is surviving on government bailout money, said earlier this week its first-quarter sales had fallen about 19 percent, while its market share stood at about 13 percent. (Reuters)

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