FOR IMMEDIATE RELEASE
Chrysler to Partner with Fiat and File for Bankruptcy; Edmunds.com Comments
SANTA MONICA, Calif. — April 30, 2009 — Chrysler is filing for bankruptcy, and this is not all bad news for the company and for the economics of the automotive industry at large.
"The merge with Fiat is a critical milestone in the evolution of Chrysler, and holds much more promise than the merger with Daimler in the '90s," commented Edmunds.com CEO Jeremy Anwyl. "Chrysler has one last chance to create relevancy for its brand in order to convince consumers to overcome the risks and buy its vehicles."
"If Chrysler is to have a post-bankruptcy future, building cleaner, more fuel-efficient vehicles that help us kick our oil dependency has got to be part of it, as it must for all automakers," commented John O'Dell, Editor of Edmunds' GreenCarAdvisor.com. "And, Chrysler's tie-up with Fiat could bring a whole new batch of fun to drive, fuel-efficient and environmentally friendly cars to our shores."
"It appears Chrysler will use bankruptcy to cut dealers and has the government's support to do so, apparently," reported Michelle Krebs, Editor of Edmunds' AutoObserver.com. "President Obama's automotive task force reportedly wants Chrysler to reduce its dealer ranks by more than half to put it more in line with its market share."
As of the end of the first quarter this year, Chrysler had about 3,200 dealers and 11 percent market share. By comparison, Toyota had just under 1,500 dealers and 16 percent market share. Fewer dealers generate more sales-per-dealer and profits for each dealer. An automaker then can reduce its costs in terms of dealer-support infrastructure, financing and incentive pay. Fewer dealers also allow an automaker to better control its inventories.
For consumers, the government has promised to guarantee warranties for Chrysler.
"No one can blame car buyers who shied away from brands that were mentioned in the same breath as the word 'bankruptcy,'" stated Edmunds.com Consumer Advice Editor Philip Reed. "Now that their warranties are being guaranteed, Chrysler and GM vehicles are good deals which are worth considering."
Year to date, Chryslers have been sold for an average of 22.6 percent off sticker price while the industry average discount is 16.0 percent, according to Edmunds.com's data.
About Edmunds.com, Inc. (http://www.edmunds.com/about/)
Edmunds.com, Inc. publishes four Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value® , is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in January 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in February 2006 and is an automotive social networking Web site and home to the oldest and most established automotive community. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.