Chrysler to cut models and dealerships

By David Bailey and Ben Klayman

CHICAGO/DETROIT (Reuters) - U.S. automaker Chrysler LLC plans to shrink its dealer network and cut some vehicles that compete with its each other for customers to become a smaller, profitable company, an executive said on Friday.

The dealer consolidation is part of a plan to sell all three of its brands under one roof.

Chrysler President Jim Press would not say just how deep the cuts might be for the automaker, which previously said it would cut a few slow-selling models.

Chrysler's dealer and vehicle model lineup is big enough to support production of 4 million vehicles per year, but it has retail sales of about 1.5 million and needs to be sized to sell about 2.5 million, Press said.

"The product portfolio has to consolidate," Press said at a J.D. Power and Associates meeting in San Francisco. "We don't know how many models we're going to have. Nobody knows that."

Chrysler has some 3,600 dealers and builds more than 30 models of cars, minivans and trucks, some of which compete more with each other than other automakers, Press said. Eliminating duplicate vehicles would give Chrysler money to spend in creating vehicles to compete in more categories, he said.

Chrysler has moved quickly since its acquisition by Cerberus Capital Management last summer to address an unfocused vehicle lineup and to answer customer complaints ranging from materials, interiors, noise and vibration.

About 55 percent of its dealers now carry all three of its Chrysler, Jeep and Dodge brands. The plan is aimed mainly at city and suburban dealers that do not carry all three brands to consolidate into larger sustainable dealerships.