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Vauxhall to trim dealer network with refranchising process

Date: 18 April 2018   |   Author: Sean Keywood

Vauxhall is to terminate its entire UK dealer network - but says most will remain with it under new agreements.

A refranchising process is taking place across all Opel/Vauxhall dealers in Europe, including the 326 UK outlets.

Vauxhall says some will leave its network - but has dismissed reports that a third will be going.

Communications director Denis Chick said dealers will receive a letter at the end of the month invoking a two-year termination period in advance of renegotiations.

He told BusinessCar: "We are not going to lose a third of the network. Inevitably we will see a few retailers leave us.

"They might want to move on to [fellow PSA brands] Peugeot, Citroen or DS or sell used cars or do something different.

"Steve Norman, our managing director, is convinced there will be no job losses as a direct result of this."

Chick said dealers were facing challenges including an increased usage of online services by buyers and the weak value of the pound, while increased service intervals also meant drivers visited dealerships less frequently.

He said: "A lot of retailers are finding profitability a challenge. The main focus of this exercise is really about helping retailers to become more profitable, and the second thing is a focus on customer excellence, which thesedays is more important than ever.

"We need dealers to be focused on customer excellence so they can build loyalty."

Chick said following the changes Vauxhall would retain  the second-largest UK dealer network, but was likely to be closer to third-placed Volkswagen than first-placed Ford.

"I think they have 200 - we have got 326. It'll be in that range but not any lower. 

"We're going to try to get the majority to come along with us.

"This is a positive move for the network and for Vauxhall, and hopefully will end up with us having a profitable network for the long term."