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Chrysler May Elect to Sell Renaults at Its Dealerships

March 24, 1987|JAMES RISEN | Times Staff Writer

DETROIT — Chrysler might sell Renault cars through its Dodge or Chrysler-Plymouth dealer networks if its acquisition of American Motors is successful, according to documents related to its proposed merger released here Monday by AMC.

Renault, the French auto maker, now has working control of AMC and uses the small, troubled company as its North American manufacturing and distribution arm. AMC's 1,300 dealers have the exclusive rights to sell Renault passenger cars in the United States.

But Renault agreed earlier this month to sell its 46.1% stake in AMC to Chrysler; in turn, Chrysler has agreed to continue the distribution of Renault passenger cars in the United States and Canada at least until 1991.

But Chrysler will be able to decide whether to sell those cars through Chrysler dealerships or AMC outlets, according to a copy of Renault's agreement with Chrysler. A Chrysler spokesman acknowledged Monday that a plan to sell Renault cars through Chrysler dealerships, as well as AMC outlets, is "under study."

Still, Chrysler has no plans to integrate AMC's dealerships into its own Chrysler-Plymouth or Dodge networks, according to Chrysler spokesman John Guiniven. The AMC dealer network "will stand alone," he added.

Chrysler has specifically agreed to continue to sell the Renault Medallion, a compact French import introduced through AMC in early March, as well as the Renault Premier, a mid-size model scheduled to go into production at AMC's new Bramalea, Ontario, assembly plant later this year.

Although Chrysler already produces similar cars on its own, Chrysler agreed not to sell any cars through AMC's dealer network that compete with the Medallion before 1990 or the Premier before 1992. The documents reveal that Renault also insisted that Chrysler sell at least 300,000 Premiers by 1992; Chrysler will have to pay a $1,300 penalty per vehicle to make up for any shortfall.

But the agreement indicates that Renault is willing to give up on some of its other products if Chrysler doesn't want them.

Chrysler and Renault have agreed to jointly decide how soon to end production of the Renault Alliance, which became the first Renault car built by AMC in the United States when it went into production in 1982.

AMC has said that it plans to continue Alliance production at its Kenosha, Wis., plant until 1989.

But sales of the French-designed subcompact have plunged so badly during the past two years that Chrysler might want to cancel the program as soon as it takes over AMC, in order to put the Kenosha plant to better use.

Renault also agreed to review its plans to import the Alpine sports car into the United States. A Chrysler spokesman says Chrysler plans to go ahead and import it anyway, since it is already scheduled for introduction in small numbers later this year.

But ties between Renault and Chrysler might deepen in later years, the pact says. Renault has agreed to continue European distribution of Jeeps if Chrysler takes over AMC.

At the same time, Renault and Chrysler agreed to "study the development of future products for distribution by Chrysler and Renault in North America and worldwide."

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