Chrysler Group Announces New Revenue-Enhancing Plan to Dealers

    AUBURN HILLS, Mich., Jan. 29 The Chrysler Group will
unveil a two-part plan to its 4,410 dealers this afternoon designed to
generate revenue and cut costs.  Dealers will be notified of the plan by M.
John MacDonald, Senior Vice President of Sales and Field Service.  It is
effective today.
    The first part of the plan calls for a Market Share Allowance, an
incentive program for dealers based on their number of new vehicle sales.
Under the new plan, Chrysler Group will set sales objectives for each dealer
every month, and dealers will be rewarded for meeting or exceeding these
goals.  The stair-step program ranges from no payment per vehicle if dealers
reach less than 75 percent of their target, all the way to tripling the amount
of money they currently receive for each vehicle sold when hitting 110 percent
of their sales objective.
    "This is another part of our turnaround plan, but what makes this one
truly unique is that we are not just cutting costs, but we are increasing
revenues as well," said MacDonald.
    In order to fund the new program, Chrysler Group will pass reimbursements
for gasoline in new vehicles on to dealers, streamline the time-table for
dealer preparation of new vehicles, adjust the reimbursement formula that
dealer associations receive for local advertising, decrease option margins by
three percent, and eliminate an allowance fund for technology.
    "We are hopeful that this becomes a win-win situation for all of us by
increasing our revenues at the same time we are decreasing costs," said
MacDonald.  "It just makes sense in our current business environment."