Posted 5/22/2009 09:18 am
Updated 1 year ago
When Chrysler announced its intention to close 789 franchises last week, the owner of Little Rock's Crain Chrysler Dodge Jeep was stunned to see his company's name on the list.
Larry Crain Jr., president of Crain Automotive Holdings LLC, said just a few days before the announcement, Chrysler representatives indicated that his family's company was going to be its Little Rock dealer going forward.
Appearing this morning on KTHV-TV, Channel 11 with Jeff Hankins of Arkansas Business, Crain said his company was in the early stages of relocating the dealership from South University Avenue to a site near the northwest corner of Col. Glenn Road and Interstate 430.
Crain said his company had invested about $100,000 in pre-construction planning for the new facility.
"We were shocked that we were given that (franchise revocation) notice," he said.
For now, the dealership is operating business as usual for the most part. Although Crain hopes to win a reprieve for his company's Chrysler dealership, he is preparing for the worst
"We are going to sell all the vehicles that we have on the lot, all the new vehicles, at deeply discounted prices in an effort to mitigate the losses that we might have," Crain said.
The changes caused by Chrysler's reorganization will be good for consumers in the short-term with some bargains, Crain said.
"In the long-run, it's going to be very difficult for car buyers to have the convenience and the selection and the competition of dealers that keeps prices low," he said. "Dealers who have to compete against one another tend to keep their prices in line, in check. When there are fewer dealers, the prices tend to rise."
Crain Automotive, which owns several auto franchises and more, ranks No. 35 among the largest private companies in Arkansas with total revenue of $295 million.
"The auto industry definitely experienced the perfect storm," Crain said. "We had rising gas prices in early 2008. The mix of product that was sold by dealers changed dramatically in the spring and summer of last year. And then we had the credit crisis that began in September."