Chrysler dealers left without vehicles

Chrysler

Chrysler

Inventories have fallen, but many Chrysler dealers can't order new cars and trucks because they are still waiting for financing approval from GMAC, which is scheduled to take over dealership financing from Chrysler Financial Canada

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Greg Keenan

Globe and Mail Update

Chrysler Group LLC will start cranking out vehicles at seven of its North American assembly plants on June 29, but some Canadian dealers say they will be unable to restock their dealerships with new vehicles because they can't get the financing they need.

Inventories have fallen to minimal levels, several Canadian Chrysler dealers said Wednesday, but many of them can't order new cars and trucks because they are still waiting for financing approval from GMAC LLC, GOM-N which is scheduled to take over dealership financing from Chrysler Financial Canada.

“We can't buy vehicles,” one high-volume Chrysler dealer said yesterday, because the dealership can't obtain so-called floor plan loans that it uses to finance the purchase of new vehicles from Chrysler Canada Inc.

While Chrysler LLC emerged quickly and relatively easily from Chapter 11 bankruptcy protection in the United States, the aftershocks are still being felt – even in Canada, where Chrysler Canada did not go into protection under the Companies' Creditors Arrangement Act.

One dealer said he is down to fewer than five Dodge Caravan minivans. Another said his inventory has dropped to less than half the usual level of more than 300 vehicles.

A third dealer said he no longer has demonstrator models for customers to drive. (None would agree to be identified.) Some dealers said GMAC approval is being delayed amid a dispute between Chrysler Canada and Chrysler Canada Financial, which is being wound up along with its parent company as part of the Chapter 11 process.

Inventories at dealerships have fallen in part because Chrysler's North American plants were shut almost immediately after the company's U.S. operations were granted bankruptcy protection on April 30, choking off the flow of new vehicles.

AutoCanada Income Fund, which owns 11 Chrysler outlets among its 22 dealerships, said this week it has signed agreements to switch to GMAC from Chrysler Financial that will allow it to finance both new and used vehicle purchases. The deal covers all AutoCanada outlets, which include Hyundai, Mitsubishi, Subaru and Volkswagen dealerships. AutoCanada had been using cash to finance vehicle purchases for some of the non-Chrysler stores.

Minivans and Jeep Wranglers are in short supply, Tom Orysiuk, AutoCanada's chief financial officer, said Wednesday.

One Ontario dealer who was already financed through GMAC before Chrysler LLC went into bankruptcy protection said he is seeking faster deliveries on several vehicles he ordered last week.

Chrysler Canada spokeswoman Mary Gauthier said financing for a number of Canadian dealerships has already been switched to GMAC and “we expect to transition the balance shortly.”

She would not say now many dealerships have been switched to GMAC. There are about 450 Chrysler dealers in Canada.

Nor would she comment on any dispute between Chrysler Canada and Chrysler Financial Canada.

Chrysler Group's two Canadian plants are among the seven that will reopen on June 29. A plant in Windsor, Ont., assembles minivans, while another in Brampton, Ont., turns out the Chrysler 300 and Dodge Charger and Challenger full-sized cars.

Plants that assemble the Chrysler Sebring and Dodge Avenger mid-sized cars, Dodge Ram and Dakota pickup trucks, Wrangler sport utility vehicles and Dodge Journey and Chrysler PT Cruiser crossover vehicles will also restart production.

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