Chrysler May Drop 145 Dealers on Lack of Inventory Financing

Chrysler Group LLC may have to terminate as many as 145 more U.S. dealers unless the retailers can find lenders to finance their new-vehicle inventory.

GMAC Inc., which replaced Chrysler Financial as the preferred lender for the Auburn Hills, Michigan-based automaker’s dealers, has been negotiating with Chrysler retailers, said Sue Mallino, a GMAC spokeswoman.

If dealers can’t get the financing from GMAC, they may lose their franchise agreement unless they can find another lender, said Kathy Graham, a Chrysler spokeswoman.

The outcome may mean fewer dealerships for Chrysler, which has about 2,400 U.S. outlets after terminating 789 as part of a government-aided bankruptcy reorganization. Chrysler exited court protection after six weeks on June 10 under the control of Fiat SpA. GMAC took over preferred financing duties for Chrysler dealers as part of the reorganization.

Of about 1,500 dealers that applied to Detroit-based GMAC to finance their vehicle inventory, about 90 percent will qualify, Mallino said. She said 85 dealers have been refused such financing and 50 to 60 others are still in negotiations.