On Thursday 789 Chrysler Dealers learned their fate. By UPS mail Chrysler dealers were notified if their dealer agreement was terminated. Those 789 dealers that learned that Chrysler was closing them got news that their operations would be shut down my June 9th. This leaves them with less than four weeks to get rid of vehicle and parts inventory that Chrysler will not be buying back.
This rapid liquidation of dealership is going to send shockwaves through the economy and vehicle markets. Our dealership employees about 70 people and is considered mid sized. I think it is safe to say that 40,000 people lost their jobs on Thursday. I would imagine Chrysler's news coupled with GM's closure announcements mean that the US will see double digit unemployment. I don't see how this is a good scenario in our current economy.
I am predicting that Chrysler vehicle values will fall drastically in the coming months. Why? Because 789 dealerships need to liquidate their inventory in a very, very short period. Those who are not well capitalized will fail early and the creditors will liquidate these vehicles at auctions in masses. By not retailing these new and used vehicles the wholesale market will be flooded with inventory and hence values will drop dramatically.
Buyer beware if you think you are going to get a great deal from a closing Chrysler dealer. The deal might look good now, but the value of these vehicles can only dramatically drop going forward.
Link to list of Chrysler Terminations:
http://wlox.images.worldnow.com/images/incoming/DealershipsExhibitA.pdf
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