Hey Mac What's Up? - New Car Distribution Looms as NADA Meeting Issue

By Mac Gordon
Senior Editor at large
Michigan Bureau
The Auto Channel

Is the growing dependency of the domestic Big Three on Europe a hurdle or a mudhole for North American dealers.

This issue is likely to be raised as a critical problem at the NADA convention meetings in mid-February.

U.S. dealers are voicing concerns on the skewing of popular models between North And South America, not to mention Ford's persistent operating Europe losses of $2 billion per quarter;

Chrysler/Fiat's nosediving sales in southern Europe, and GM's drastic setbacks in Europe threaten the existence of Opel.

The fact that GM recruited a senior VW executive, Karl Thomas Neumann, 51, to run Opel, is noteworthy for U.S. dealers running short of Chevrolet Corsa and Cruze cars or Ford Focuses and Fusions.

Nor are strapped North American dealers, seeing the largest dealer groups scoop up deliveries of sold orders like peanuts, consoled by 'distractions' in the distribution of subcompact and compact cars.

Said an anonymous dealership group CEO, “We're desperately short of new small cars and can't understand why any plants have to be closed. We need as much capacity as we can get. I hope Mark (Fields), (Ford's new COO) and GM's vice-chairman, Steve Girsky, step up to our inventory squeezes -and will press that at the Orlando meetings.

The divergent views on inventory allocations are not shared by Chrysler and VW. Volkswagen's huge Golf, Beetle and Jetta plant at Puebla, Mexico, is being enlarged, along with the Passat plant in Chattanooga.

Fiat dealers in North and South America have received abundant shipments of 500L minicompacts, with the blessing of UAW president Bob King.

“We don't want dealers to be short of stockpiles,” says Sergio Marchionne, Chrysler/Fiat CEO. “That's not the way to strengthen our sales of 500s, Darts and Jeeps.”

VW executives expect no distribution complaints at Orlando, declaring that the German brand is “still on track to sell one million cars a year in the U.S. by 2018-800,000 Volkswagens plus 200,000 Audis. “No push needed & no pull, either,” agree VW dealers.