Vauxhall to cut its dealer network by a quarter
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Vauxhall is to cut its car dealer network by a quarter in an attempt to boost its profitability. Chris Godsmark, Business examines the latest shake-out in the UK car market.
The cuts in Vauxhall's dealer chain have been outlined internally by Nick Reilly, chairman and managing director, as part of a policy called Managed Area Approach (MAA). It would see the current network of 520 dealerships reduced to around 380 to 400, although some dealers believe it could see Vauxhall cut almost 200 of its sites.
The policy would see bigger dealer groups invited to expand their presence in urban areas in a move which is likely to intensify the pressure on smaller, independent outlets. Some 430 separate businesses currently run Vauxhall's dealer network, a figure which will drop as companies with bigger resources take control of larger groups of sites.
The manufacturer has asked dealers to invest heavily in extra customer service benefits, but smaller franchises were unlikely to be able to afford to take on further staff.
Vauxhall, part of the US giant General Motors, confirmed the cutbacks, but said that at the same time dealers would be opening smaller satellite outlets, many of which would not sell cars but would provide servicing facilities. This could increase the overall network to 600 sites.
"We've been in touch with retailers over the past few months. Those who will remain with us have all been contacted," said a spokesman.
The company said the MAA policy would be implemented in the spring. "We're looking reducing the number of traditional retailers but increasing the number of customer facing outlets. We'd describe it as an an evolution rather than a revolution. Times have changed - it's pretty difficult to be profitable today."
Other manufacturers are also rationalising their networks. Last year Fiat gave control of its entire greater London sales operation to the Derby-based Pendragon group. Pendragon will have opened 17 Fiat dealerships in the M25 area by next spring and says it can boost earnings by centralising marketing and accounting operations.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments