Chrysler Name to Leave Europe in One Year as Brand Merges with Lancia

As Fiat works to implement its elaborate five-year plan for the combined Fiat/Chrysler company, big changes are coming on both sides of the Atlantic. The first will land in Europe, where Fiat has recently informed dealers that the Chrysler name will disappear on the continent as its products merge with Lancia for the European market.

Automotive News reports that Fiat has recently notified 1150 Chrysler and Lancia dealers across continental Europe that their contracts will be dropped effective May 31, 2011, in accordance with European law requiring one-year's notice. At that point, Chrysler and Lancia will be integrated into a single sales network and the Chrysler name will disappear as its models are rebadged as Lancias for European markets. As Lancia pulled out of England and Ireland in the early 1990s, the Chrysler name will continue to exist there and may include some re-badged Lancia models.

"Our plan is to have in place by May 2011 a Lancia/Chrysler integrated network comprising about 800 dealers and over 1,000 dealerships," Chrysler and Lancia CEO Olivier Francois told Automotive News Europe in an e-mail.

This will be a significant shake-up for existing Chrysler and Lancia dealers in Europe. Lancia has 595 dealers across Europe with 785 showrooms between them. Chrysler, meanwhile, has 556 dealers with 750 showrooms, which in many cases also carry the Dodge and Jeep brands. While Lancia sold 121,000 vehicles in Europe in 2009, Chrysler sold only 11,500 and 102,000 of Lancia's sales were in its home market of Italy. Fiat believes that combining the two brands, each with their relatively small current lineups, will create one full-size lineup that's more appealing to Europeans.

As we understand it, Fiat will cancel all existing Chrysler and Lancia distribution contracts on May 31, 2011, then provide about 800 dealers and 1,000 showrooms with new contracts for the new, combined brand. That leaves 151 dealers and 535 showrooms out in the cold. The new lineup will consist of eight vehicles including the current Lancia Musa, Delta and Ypsilon and Chrysler 300C and Voyager (Town & Country in the U.S.). That leaves three slots to fill and will likely include replacements for the Chrysler Sebring and PT Cruiser and one other model. Altogether, Fiat hopes to see the post-merger Lancia brand move 300,000 vehicles in Europe in 2014, up from 132,500 last year.

Where does that leave Dodge and Jeep? Nicheville. Fiat expects Dodge to become a small-time player that will retain its name and import only its hottest products, the Charger, Challenger and Viper. It's not clear whether Dodge will have its own dealerships or be sold through Fiat, Alfa Romeo or Lancia dealers, but a combination of those options is more likely. Indeed, Jeep will continue as a semi-independent brand with its own dealers in some places and new franchises through Fiat, Alfa Romeo and Lancia dealers as needed to fill any holes in the market.

What does this mean back here in America? Likely the exact opposite. Fiat is expected to begin re-badging some Lancia models as Chryslers for the U.S. market and both Fiat and Alfa Romeo will likely follow the same path as Dodge and Jeep are in Europe, spreading through existing Dodge/Chrysler/Jeep dealers and perhaps even some Maserati dealers. It will likely be a harder task for Fiat and Alfa Romeo, as both brands left the U.S. market years ago and have no standalone dealerships in this country while Dodge and Jeep at least have a foothold in Europe.

Source: Automotive News (Subscription Required)

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