PSA Group terminates Opel dealership contracts to slim down network

17 April 2018

17 April 2018

As it continues to restructure Opel and its British brand Vauxhall, PSA Group has announced that it is to cancel all dealer contracts this month with two years’ notice.

The announcement has been made to all of the manufacturer’s dealerships in Europe, and allows the group to renegotiate contracts and slim down the network. It is believed that around a third of the current 1,600 forecourts could be axed.

Opel’s sales and marketing chief, Peter Kuespert, said new contracts will be offered by 2020 that focus more on performance and creating a stronger culture to promote it. ′That will pay off for our performance-oriented dealers,’ he told Automobilwoche,

PSA and Opel examine dealership performance as part of Opel’s PACE turnaround plan to restore sustainable profitability. ′It was shown that the range of performance within our dealer network is too great. That is not something we can ignore,’ Kuespert said.

New contracts put into place will put less emphasis on the dealer’s fulfilment of standards. ′Instead of paying margins to dealers for the fulfillment of certain requirements, in the future we will pay performance-related bonuses that target sales figures and customer satisfaction,’ Kuespert said.

Complexity will also be reduced. For example, in future contracts for the sale of commercial vehicles and passenger cars will be the same. ′We are counting on our dealers even more to drive our commercial vehicle offensive. We still see great potential in this financially attractive segment,’ he added.

′Then we would propose new dealer contracts with those partners with whom we saw, for them, a stable economic future beyond that,’ Vauxhall managing director Stephen Norman told Automotive Management.

′In the vast majority of cases, these contracts that are being cancelled will be followed by new contracts that will take effect in 2020.’

It’s much more mandated by the ability of a retail dealer, whatever its size and location, to be profitable and to satisfy customers, than it is somebody with a map deciding Vauxhall needs dealers in particular spots, he said.

PSA Group has not said how many Opel and Vauxhall dealerships would be retained following the cancellation. The move is the latest in a series of cost-cutting measures at the brand, which was acquired by the French carmaker in August 2017. In November, the PACE! plan was launched to reverse the ailing manufacturer’s finances, while a number of job losses at plants in the UK and Europe have been announced.