Chrysler Group has begun the first step in picking dealers to reintroduce Fiat to the U.S.

Chrysler Group LLC has started the process of recruiting its dealers to sell Fiats in the U.S. But not all will be chosen.

Chrysler has already identified roughly 125 markets in 41 states with growth potential for small cars, based on current small-car registrations and five-year projections, said Ralph Kisiel, a spokesman at the company.

The automaker, 20% owned by Italy's Fiat SpA, sent e-mails to all its dealers July 5 with seven basic guidelines to qualify to sell the first Fiat model, the 500 subcompact, later this year.

Interested Chrysler, Jeep, Ram and Dodge retailers will have to show they have the financial resources to support the return of the Fiat brand to the U.S. after a 26-year absence. The best-performing dealers in the select markets will get preference over others, and "really good performing dealers on the outskirts" of the target areas will be encouraged to apply, Kisiel said. Retailers must have a separate facility for Fiat, along with a dedicated sales and service team, similar to BMW's approach for Mini.

"We want customers to be immersed in Fiat," he said.

In the next few weeks, Chrysler will be mailing out application guidelines to dealers in or near the select markets, Kisiel said. Dealers will then send the automaker their proposals detailing why they would be good Fiat dealers. Chrysler will later invite dealers to a meeting at its headquarters in suburban Detroit and announce the Fiat dealers in September.

Chrysler Group dealers are eager to get on board. They don't have a lot of new products to sell; the only all-new model this year is the newest-generation Jeep Grand Cherokee.

"We are betting the ranch to try to get Fiat," said Ken Papa, principal of Papa's Chrysler-Dodge-Jeep in Connecticut. "We need the Fiat franchise to help us breathe some life into our existing brands."

Alan Helfman, general manager of River Oaks Chrysler Dodge Jeep in Houston, said he's "frenetic about the possibility of selling Fiat" since "it would be nice to have something in that segment to sell."

Steve Kaiser, president of Fairfield Auto Group in Pennsylvania's upper Susquehanna Valley, said his Chrysler Group dealership is very interested in becoming a Fiat dealer. "The 500 is a neat, little car and having it would help if gas goes beyond $3 a gallon."

But while Kaiser said he's encouraged at the idea, he's "waiting to read the fine print" on the proposal.

While Tom Barenboim, a Chrysler Group dealer outside of Boston, said he's very excited about the Fiat 500, he wants to know more about the brand's product pipeline and availability to insure his investment in a new facility and staff would be sound. "I need more information to make the right decision."

Chrysler Group's new U.S. light car and truck sales rose by 13.5% to 364,453 units in the first half of 2010 compared to the same period last year, says Automotive News. Still, that's below the industry's overall rise of 17% year over year.

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Jean Halliday is a seasoned journalist with the nation's longest consecutive run covering auto advertising. Her years in the trenches include stints at Automotive News, Adweek and Advertising Age. The native New Yorker now lives outside the Motor City. You can read Jean's blog at AutoAdOpolis.wordpress.com.

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