Yahoo Finance Vauxhall will close one in three UK dealers - after pitching all 326 against each other in a survival of the fittest
Vauxhall has confirmed it is looking at axing one in three dealerships – after pitching all 300-plus against each other in a survival of the fittest.
Reports say the carmaker’s move will put some 3,700 jobs at risk and comes just weeks after it insisted it had no plans to cut back on dealerships.
The French-owned company is to cancel contracts with all of its 326 showrooms in the UK. It will then renegotiate new deals with the best performing 200 or so branches.
MORE: Vauxhall dealers fear one in three car showrooms will be axed
Stephen Norman, MD of Vauxhall Motors, said: “The requirements of the industry going forward and the requirements of the brands Opel and Vauxhall … would not require as many retail outlets as the brands currently have.”
He said he did not expect any job losses as a direct result of the action and was confident “people will find work in other franchises”.
The dealership network employs about 12,000 people in the UK.
But he declined to say exactly how many sites he expected to be axed among the 326 currently operating.
Norman said 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”.
MORE: Consumers don’t know where to turn, says former industry boss as car sales dive 15%
Britain’s motor industry has been hit by a slump in sales for the past year or so that has become particularly acute since the start of 2018.
Sales of new Vauxhall cars fell by 18% year-on-year in the first three months of this year.
The industry has blamed confusion over what the future holds for diesels as the government has indicated plans to rid the UK’s roads of both petrol and diesel cars by 2040.
Brexit uncertainty has also been raised by the industry as undermining consumer confidence with people choosing to stick with their current car rather than buy a new one.
Vauxhall’s communications director Denis Chick said the carmaker will change the remuneration process for dealers and introduce new standards to better reflect the changing market, as consumers do more research online.
He told the Press Association: “We will probably lose a few retailers.”
MORE: Vauxhall owner hands boost to Luton plant
Vauxhall said the move forms part of a Europe-wide effort by French parent group PSA to bolster sales and customer satisfaction while cutting costs.
About 1600 Opel and Vauxhall dealers across network will be given two years’ notice from April 30 that their current working relationship is being terminated. Two-thirds of the dealers will be offered new terms.
PSA recently announced that its Luton plant would build PSA vans from 2019, but a decision for the future of the Ellesmere Port factory – which makes the Astra – won’t be made until 2020.
