Business: Chrysler South Africa – Mid-year Review
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2009 has been a watershed year for the Chrysler Group both internationally and locally thus far. Relative to the market, Chrysler, Jeep and Dodge vehicle sales have performed well with a smaller decline compared to the previous year. The overall drop in the South African market is 34% and Chrysler South Africa’s brands have managed to sustain reduced levels below half that percentage at 17%. Furthermore, sales volumes for the local subsidiary have remained above target during the full six month period.
After protracted negotiations with the US Congress over a bail-out plan for Chrysler in the early part of 2009, the company and 24 of its US based subsidiaries entered into Chapter 11 bankruptcy in March. This process, under Section 363 of the US Bankruptcy Code, allowed Chrysler to enter a court-supervised course of action to sell its assets quickly and in an orderly manner as the best way to reinvent the brands and maximise value for stake holders.
The process allowed Chrysler to emerge from bankruptcy within the 60 day period. On June 10 2009 an alliance with Italy’s Fiat Group was announced with the Italian firm taking an initial 20% stake in Chrysler with the option to increase this to a maximum of 35% upon completion of certain product sharing targets. Ownership of Chrysler is now controlled in the following ratios: the US Auto Workers Union – 55%, US Treasury and Canadian Government – 10% and the balance with the Fiat Group.
Chrysler South Africa has been able to buck the local trend when it comes to expansion of its dealer network. During the first six months of 2009, two new Chrysler, Jeep, Dodge dealerships were opened, one in Kingwilliamstown and the second in The Strand. Plans are in place to open a further two dealerships in the Gauteng area during the course of the second half of 2009. A number of facilities were also relocated during this time, further expanding the CJD dealership reach and coverage.
Several successful marketing / sales incentive programmes have been run during the course of 2009 which have aided the sales process for our dealerships. For the first time in South Africa employee pricing was offered on certain vehicles, this allowed buyers the opportunity to purchase new cars at prices normally only available to Chrysler staff members. The Hail Sale also proved popular, a number of hail damaged, but fully repaired vehicles were snapped up at considerable discounts by customers. The Discover Dodge campaign that is currently running allows customers the opportunity of test driving any Dodge product and automatically becoming eligible to win a brand new Dodge Caliber.
Chrysler South Africa has also remained at the forefront of the digital space with the corporate websites undergoing redesign in line with the new international standards. The Dodge website is the first to undergo refurbishment with Chrysler and Jeep following suit in the third quarter of 2009.
In addition, Chrysler South Africa recently went live with their 2nd generation websites for the mobile phone user. The sites offer a brief model overview for each brand including an image gallery, with high quality images. A dealer locator, showing the full Southern African network, is also available allowing the user to instantly call a dealership.
As part of Chrysler SA’s Corporate Social Responsibility endeavours, management and staff members, through a fund raising initiative, raised R5 100 for the Walter Sisulu Paediatric Cardiac Centre based at the Sunninghill hospital in Johannesburg.
Having faced strong challenges in the market place, Chrysler South Africa has weathered the economic downturn with resilience during the first half of the year and will continue to do so with the support of its enviably strong dealer network
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