A third of Vauxhall dealerships in the UK could be closed as part of an aggressive efficiency-boosting strategy laid out by the brand's new parent company, the PSA Group.
An anonymous source has told Automotive Management that more than 100 of the company’s 324 UK retailers could go within a year, putting 3800 jobs at risk.
“PSA has already implemented savage cuts in its manufacturing operations and it looks like that's set to continue in retail,” the unnamed dealer said. “A third of dealerships will go.”
Vauxhall told Autocar that the claims are “pure speculation”. It said in a statement that “The Opel/Vauxhall PACE! plan is improving the efficiency of the business in all areas.
“Within the plan, the go-to-market strategy is being carefully reviewed, including the contractual framework with the dealers”.
The source said the dealer network was now running with high inefficiencies because it's set up to handle much higher volumes, with sales having peaked at 330,000 in 2007. In 2017, Vauxhall sold 195,137 vehicles.
“Last year, I think the network ended up at around 0.35% return-on-sales. You can't sustain that for long. Without the volume, there are just too many sites,” the source told AM. “Whether this is a crisis is a moot point, but either way, many Vauxhall dealers will already be saying ‘enough's enough’.”
Since acquiring Vauxhall and its German sister brand Opel late last year, PSA has been particularly vigorous in its attempts to cut costs from the UK-only brand.
Vauxhall recently offered 250 members of its Ellesmere Port staff voluntary redundancies in a bid to reduce costs and improve efficiency at the factory. This followed the first wave of cuts in October last year, with the total number of jobs Vauxhall plans to have removed from its Cheshire site by September 2018 amounting to 650.
PSA’s strategy aims to return Vauxhall and Opel to profit by 2020.