Vauxhall and Opel brands will “terminate all dealer franchise contracts with two years of notice”, Vauxhall managing director Stephen Norman has confirmed.
During a conference call, he said notice would be given on 30 April, meaning all contracts will end on 30 April 2020.
The last time Vauxhall refranchised its dealer network was in 2013, when it trimmed its dealer network from 349 to the 326 locations contracted today.
The Vauxhall boss wouldn’t confirm how many of Vauxhall’s 93 retailers, which operate 326 retail locations in Britain, would be retained, and he denied speculation that around at third could go. “The majority of retailers who are currently with us will remain,” he said.
Norman, who has been at the helm of Vauxhall since the start of 2018, two months after parent company the PSA Group completed its buyout of the brand, said that the Vauxhall dealership network is making profit but that the decision to terminate current contracts came in an effort to boost overall profitability.
“We believe some dealers need to make more money,” he said.
Vauxhall sales tumbled in 2017, with demand for its models down to 195,000 units, a decrease of 22% on 2016.
In the face of this, Norman explained that dealers offered new contracts would be chosen because they rank highly for profitability, “including used car sales and after sales, as well as customer satisfaction”.
Opel, Vauxhall's equivalent in Europe, will also reduce its number of dealers, which currently stands at about 1600 across the continent, 400 of which are in Germany.
Norman (pictured below) dismissed speculation that the refranchising would lead to inevitable job losses in the UK car retail industry. Vauxhall employs 12,137 people in its UK dealer network, but Norman emphasised his belief that all dealers not provided with Vauxhall contracts would find other outlets to represent.
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PSA - fixing what GM didn't want too!
PSA are simply doing what was needed. GM believed in volume ie pile ehm high and give massive discounts hence why Vauxhall/Opel are making a loss on cars. PSA are now going to stop all of that and keep the dealerships that make the most profit, makes sense. Additionally they want to pair them up with the PSA dealerships make sense again.
As for all those typical fols who say kill the Vauxhall name and use Opel... why?! Vauxhall has a loyal following and the products are getting better and from the talk of PSA they will get the tech GM denied them which can only be a good thing.
From my experience of Vauxhall dealers they just want sales figures and are not interested in selling higher spec (more profitable) cars. They just sell the bulk bought mid spec model that then devalue the rest. If PSA can get Vauxhall back into profit like it did with the PSA brands then things can only get better
Only ONE set of dealerships required
For a single company - VPSA - there is the requirement for one set of outlets not three, so all the dealerships will become 'PSAV' or VPSA if you prefer.
Tirmming dealers
Way back when BL did the same, those left with nothing to sell took Korean and Japanese makes on, so it all backfired in the end. Maybe Ssangyong would appreciate a few more dealers to switch over.
Trimming dealers
Spot on - the dealers BL ditched were often the smaller ones with higher service levels and their customers went with them to the new franchises they took over. It seems counterintuitive to make it more difficult for customers buying your product to reduce their choice of dealership and make them travel further. It makes it easier for lazy HQ administrators though. That's not to say that some Vauxhall dealers need ditching!