British brand and its German alternative, Opel, will only propose new contracts for most successful businesses

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.

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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.

“I am not expecting any of these people’s jobs to be threatened,” he said.

Vauxhall’s dealer franchise restructuring could involve closer integration with its PSA Group siblings, Citroën, Peugeot and DS. Norman told Autocar that sharing some retail sites with its sister brands was “almost inevitable” because this option gives both Vauxhall and Opel “a flexibility that we didn’t have before”.

Refranchising is just one part of the big changes afoot for Vauxhall. Norman plans adjustments to the company’s commercial, pricing and advertising policies. The brand recently announced that its Luton plant would build PSA vans from 2019, essentially confirming the future of the site for a decade.

But a decision for the future of the brand’s Ellesmere Port factory won’t be made until 2020. The site, which builds the Astra, cut 400 jobs from its workforce last year. It now operates with one shift per day, rather than two.

The changes come as part of the PSA Group’s plans to boost efficiency in all brands, outlined by its Push to Pass business plan that was announced by chairman Carlos Tavares late last year.

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Comments
17

16 April 2018

A lacklustre range of cars - for which we can blame GM.

Dealers that have long had a poor reputation.

A sad day but I fear the end of Vauxhall is in sight. 

Steam cars are due a revival.

16 April 2018

What a disingenuous statement. Of course peoples jobs will be threatened by this announcement!

Mind you, maybe some Vauxhall dealers will be delighted to be set free...

16 April 2018

A Vauxhall dealer not far from here started selling Kia cars back when nobody else wanted to. Now most of his trade is Kia.

16 April 2018

They should really grasp the nettle and bin the griffin at the same time. Rebranding to Opel would give them the kickstart they need. And some desirable cars too, obviously.

17 April 2018
Big Jeff wrote:

They should really grasp the nettle and bin the griffin at the same time. Rebranding to Opel would give them the kickstart they need. And some desirable cars too, obviously.

Ditch the Griffin...?, would the Germans accept ditching Opel badge.....?, it’s down to heritage, Vauxhall is an old Car maker in Blighty that’s the sole reason, as for lack lustre Cars as someone else said....I see a lot of Astra, Corsa, Insignias not to Vans with the Griffin badge on them so some are liking brand !

Peter Cavellini.

16 April 2018

Unless you acquire one on cheap pcp you would be taking large risks buying one ,can't help but feel their days are numbered.

16 April 2018

Am I the only one who still feel weird that Opel and Vauxhall isn't part of GM anymore. It's a pity that they decided to abandon Europe. 

17 April 2018

If owned a Vauxhall franchise and didn't have a PSA franchise as well I'd be looking for a new brand to represent

17 April 2018

Let's face it 326 dealers sounds an awful lot. VW sell more cars and I don't see as many dealers as I do Vauxhall ones (not scientific I know).  Wish Vauxhall and the British workers well, unlike alot of the other posters here.

typos1 - Just can’t respect opinion

17 April 2018

This makes perfect sense. PSA are cutting back on new car discounts to improve their profitability; sell fewer cars but make more profit doing so. Reduce the number of dealers to allow the remainder to make good money from sales. PSA have made it quite clear that they have a 2-3 year plan to make Vauxhall and Opel profitable, something GM failed to do 

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