The Chrysler name will disappear from mainland Europe by 2011, with all its models being rebadged as Lancias.
However, the Chrylser name will live on in Great Britain and Ireland, where Lancia models are not sold.
“Our plan is to have in place by May 2011 a Lancia/Chrysler integrated network comprising about 800 dealers and over 1000 dealerships,” Chrysler and Lancia CEO Olivier Francois told Auto News Europe.
Parent company Fiat has written to almost 1100 Lancia and Chrysler dealerships across Europe informing them that their contracts will end on 31 May 2011.
Instead, a new dealership network to deal with sales and distribution of Lancia and Chrysler products solely under the Lancia name will be created by Fiat.
Fiat's sales chief Lorenzo Sistino said last week that dealers would benefit from the decision as it would allow them to sell a full product line-up.
Chrysler dealers selling Jeeps will become sole Jeep retailers and Dodge will now become a niche player in Europe, importing small-volume muscle cars from the US.