The move will cut the automaker’s dealership network by a quarter, from 3,181 to 2,392, and will leave Glendale Dodge as the city’s sole seller of Chrysler vehicles.
If the automaker gets the go-ahead for its proposal, it would leave a vacant car lot on the Brand Boulevard of Cars, where every major automaker has a store, Glendale Development Services Director Philip Lanzafame said.
“You have a network of auto dealers that all work together, and they, together, attract shoppers,” Lanzafame said. “They’re an important part of our sales tax base, and to have an erosion of that has an impact.”
In its bankruptcy filing, Chrysler argued that its dealership network was unsustainable in the current car market, where some of its stores regularly compete with one another for customers.
“A Chrysler dealer may sell Chrysler Town & Country minivans and a nearby Dodge dealer may sell Dodge Caravan minivans, which may compete for the same customers,” the filing read.
That may have been the case in Glendale, said Jack Kyser, head of the Los Angeles County Economic Development Corporation.
Not only were the city’s two dealers competing for similar customers with similar vehicles, Kyser said, but they were trying to do so amid a changing car-sales landscape.
“Even though both dealers may have been, in the old days, profitable, in the new market of the auto industry, you don’t know how quickly customers are going to cut back,” he said.
News of the court filing Thursday created a stark contrast in atmospheres at the two dealerships.
Glendale Dodge had received a letter confirming that Chrysler will be continuing business with the dealership, which prompted phone receptionists to answer calls with the addition, “We’re here to stay.”