Vauxhall closes third of dealership networks amid plunging sales – 3,700 jobs at risk

April 17, 2018

VAUXHALL will stop the contracts of all of the 326 dealerships putting 3,700 jobs at risk in the UK as the company deals with falling sales and a changing motor industry.

The company, which employs more than 12,000 people in the UK, is ending the dealer contracts as it atempts to reorganise its network.

Vauxhall dealerships across the UK, including Sheffield, Doncaster and London could be at risk of closure as the struggling car firm axes branches.

There are also fears for the future of the Vauxhall factory at Ellesmere Port after the car firm announced its scaling back its dealerships.

Around 1600 dealers across the European network will be given two years’ notice from April 30 that the manufacturer is ending its business deal with them.

Related: Vauxhall to consult franchise owners over plans to reduce number of dealerships

Vauxhall’s managing director, Stephen Norman, said: “Conditions in the motor industry are changing, the competition is much more ferocious today especially in the UK than it was five years ago and inevitably there are different methods of consumption of automotive products and services including online and digital.

“Conditions in the motor industry are changing, the competition is much more ferocious today especially in the UK

Vauxhall’s managing director, Stephen Norman

“Given what we see as the evolution in motor consumption in the next five to ten years – we have to think about the profitability of our franchising network and it is in their interests that taken this decision difficult though that may be to perceive at this stage.“The profitability of the network is positive for quarter one this year and for the full year last year but the amounts being made are in our opinion insufficient as things stand today and we want to protect the profitability of the franchise as times goes by.”The chief said that Vauxhall would continue to be Britain’s second-largest dealer network after the restructuring.Although the sales of Vauxhall cars have been falling for a while, the decline was quicker last year and sales dropped 22 per cent.Vauxhall sales plunged by more than a fifth last year, which was worse then the market decline of 5.7 per cent.

Mr Norman said that the changes in the company are not related to Brexit and it would have happened “with or without Brexit”.

These cuts have come just three days after Jaguar Land Rover announced it is cutting 1,000 jobs after falling sales.

Vauxhall’s European sister company Opel is also shutting down dealerships as it tries to adapt to customers visiting car dealers less.

Shadow Business Secretary, Rebecca Long-Bailey, has said the changes to Vauxhall were “deeply concerning”.

She added: “The Government must urgently meet with Vauxhall and the trade unions to ensure that workers are properly supported and jobs safeguarded.”

Vauxhall’s communications director Denis Chick said the car maker will change the remuneration process for dealers and introduce new standards to better reflect the changing market, as consumers do more research online.

He said “We will probably lose a few retailers.”

Source: Express

Vauxhall to consult franchise owners over plans to reduce number of dealerships

April 16, 2018

Vauxhall will tomorrow launch a consultation with its dealers around the country about plans to consolidate sites as it battles with tough conditions for the car industry.

The British brand, bought by French car giant PSA a year ago, is examining the number of dealerships around the country as it tries to adapt to changing consumer behaviour.

As part of the integration with PSA Vauxhall is “looking at every part of the business” to find ways of “streamlining” it, a spokesperson said.

No closures or job losses will be unveiled tomorrow, although the plans will eventually result in fewer dealerships as well as the potential for further consolidation of different brands into the same locations.

Related: Vauxhall closes third of dealership networks amid plunging sales – 3,700 jobs at risk

Vauxhall has no powers to close down franchises, which are owned privately, although the manufacturer’s franchise board, the body representing franchise owners, is already working on plans to change the network.

Boosting profitability has become a key concern of car makers in the UK, with falling car sales alongside structural changes to the way in which consumers buy cars with the rise of the internet and personal contract purchases.

One possible option for Vauxhall may be to move more resources to pop-up shops in locations such as shopping centres.

PSA’s ownership has already shone the spotlight on the profitability of Vauxhall’s operations, with chairman Carlos Tavares last month saying the firm may hold back investment in the Ellesmere Port Vauxhall factory until after a Brexit trade deal is finalised. It is seeking to cut 650 jobs.

However, Vauxhall has since announced it will produce the next generation of its Vivaro van at its Luton site from 2019.

Source: City A.M.