Chrysler Corp.'s decision to directly enter the leas­ing field was based on a simple fact. The company felt it wasn't getting it fair share of the leasing market.

For years, General Motors Corp., principally as the result of its Chevrolet division, has dominated the leasing field. Ford Motor Co. ran second and Chrysler a poor third. Recently Ford launched it own leasing program in the form of Ford Authorized Leasing Sys­tem. GM doesn't have an organized leasing network and has no plans to establish one.

Chrysler officials long felt that individual leasing companies were discriminating against Chrysler-made cars in favor of GM and Ford products. There while it is difficult to determine whether there was actual discrimination against Chrysler cars, there is no doubt that many independent favored Chevrolet and Ford over Chrysler cars. Part of this was due to the Chevrolet-Ford-Plymouth price structure; part to the higher resale value that Chevy and Ford held over Plymouth. In recent years however, Chrysler has promoted a guaranteed depreciation program aimed at attracting fleet business.

Robert D. Armstrong, president of Chrysler Leasing Corp., told Automotive Fleet that the com­pany expects to have licensees representing it in 16 major U. S. markets and their respective contiguous smaller areas between now and the introduction of the 1964 models.

"We are establishing a nationwide network of licen­sees which will be competitive in every respect with similar organizations," Armstrong said. "Initially we will have Chrysler leasing system licensees in Detroit, Chicago, Cleveland and San Francisco. This network will be extended to other cities as quickly as it can be accomplished on a quality basis-we will not compro­mise quality for the sake of speed."

Armstrong also said that Chrysler is currently offering direct leases to major national fleet accounts. Needless to say, this move has greatly upset many independent leasing organizations since they feel that they cannot successfully compete with a company as huge as Chrysler.

While Chrysler has made no public pronouncement on its direct leasing, it is rather obvious that the com­pany isn't too upset about the complaints of inde­pendent leasing firms.

"For years I had to beat my head against the door to get leasing companies to handle our cars," one Chrysler official told Automotive Fleet. "Now they're screaming about the competition. Tough."

There have been recurrent rumors, unconfirmed by Chrysler, that the company's prime aim in offering direct leases is to assure a suitable penetration of the market. Reportedly Chrysler has told its dealer council that it will get out of the direct lease business once it feels it has sufficiently penetrated a new ac­count with a fair share of the total car brand mix. The account then would be turned over to a member of the Chrysler Leasing Corp. system. Presumably this will take one or two years.

Chrysler still has yet to completely outline its plans concerning direct leasing. At the recent American Automotive Leasing Assn. convention, for example, a session was devoted to the Chrysler leasing associa­tion without any comment from Chrysler officials. Chrysler is an associate member of AALA yet it did not have an official representative at the session. Most other auto companies were in attendance. Some delegates attributed Chrysler's absence to the fact that the company wasn't fully ready to reveal its plans.

On October 18, Chrysler entered into an agreement with Econo-Car International Inc., a New Jersey-based rent-a-car and leasing firm whereby Chrysler will lease cars to Econo-Car which in turn will lease the cars to its rental licensees. The agreement is for 18 months and may be renewed for an additional 18 months provided that during the initial period Econo-Car leases not less than 1,500 vehicles. All vehicles must be used in "bona fide rent-a-car service."

Under terms of the agreement, Econo-Car will pay Chrysler a stated monthly rental charge for each ve­hicle plus destination charges, titling, registration, in­spection and licensing charges. Econo-Car will main­tain the cars and be responsible for full insurance. There is also a security deposit required on each car.

According to Lawrence G. Dixon, president of Econo-Car, the sub-leasing program is being offered to licensees as an option. It may replace or be used in conjunction with current practice of purchasing cars. Upon termination of the lease period, licensees may turn in their vehicles or purchase them for re­sale.

Dixon said the leasing agreement will involve more than $3,000,000.

Econo-Car was formed in October, 1961 and on May 17, 1962 it acquired Great American Auto Leas­ing Co. and entered the leasing business. Chrysler Corp. previously had a co-operative advertising pro­gram with the company whereby it paid $3 for every $4 spent on advertising featuring Chrysler cars.

Armstrong said that the majority of the licensees will be Chrysler Corp. dealers, many of whom are already engaged in leasing and renting. The non-Chrysler outlets will be independent agencies.

According to Armstrong, Chrysler Leasing Corp.'s business development staff will provide its licensees with continuous marketing and management guidance and with procedures for establishing and operating a leasing company. Chrysler will also make its own lease finance plan available to its licensees or will provide assistance in arranging for the financing of leases. Armstrong also said that Chrysler Leasing will assist licensees in the sale of used vehicles when their leases expire.

General offices of the new Chrysler leasing com­pany have been established in Detroit and branch offices will be opened in additional metropolitan areas as licensees are appointed, Armstrong said.

Chrysler has gone all-out in its efforts to build its leasing system. Top management positions are filled with men who have a solid fleet background. Three key positions were recently filled with the appoint­ment of William J. Bird, William C. Hanway and Ro­land C. Henning.

Bird was named vice president and assistant to the president. He formerly served as director of fleet sales for Chrysler. At one time he was vice president in charge of sales for the Plymouth division.

Hanway succeeds Bird as director of fleet sales, having formerly served as assistant fleet sales director. Prior to that he was in charge of truck sales activities for the Dodge division.

Henning, named national lease account executive, joined Chrysler Corp. last November. He will be re­sponsible for providing specialized account analyses to national fleet accounts and for promoting and ne­gotiating direct lease business. Prior to joining Chrysler Henning was area manager for the Ryder Auto Leasing Co. in Denver.