By Debbie Holden 18 Apr 2018 7 min read

Vauxhall to reduce dealer network by a third

Following falling sales figures, Vauxhall is planning a reshuffle of its dealer network which will involve reducing the number of dealerships from 326 to around 200 in the UK.

Vauxhall was bought by PSA, the parent company of Peugeot and Citroen, last year. The move is part of PSA’s plan to return Vauxhall and its sister brand Opel, to profitability. Overall, around 1,600 dealerships across the European network will be given two years’ notice of the termination of their contracts from April 30. New contracts will be proposed to around a third of these dealerships.

The brand has been struggling to deal with an increasingly competitive market and changing consumer habits as online sales are expected to increase. Vauxhall sales fell by 22% last year, far greater than the 5.7% fall seen across the UK car market. This equates to the sale of 195,000 Vauxhall cars in the UK last year.

There are around 12,000 staff employed in UK Vauxhall dealerships, however, the company’s UK boss, Stephen Norman, said he did not expect jobs to be lost as a result of the refranchising.

“Based on 42 years experience in the industry, and having been through four of these network refranchisings, I do not expect jobs to be threatened. I don’t want to de-dramatise it, but refranchising is not something that doesn’t happen at regulator intervals in the motor industry. Nobody is being sacked.”

He added: “The vast majority of franchises will continue as before. We do not expect a reduction in the number of retail dealer outlets as a result of this action.”

Vauxhall started informing dealerships of its decision on Monday after sales in the first months of this year fell by 18%.

More automotive news