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Vauxhall boss denies third of dealers to go

By James Pugh | Oswestry | Business | Published:

Vauxhall has denied speculation that as many as a third of dealerships will close as part of its major UK overhaul.

Vauxhall boss Stephen Norman believes refranchising won't cause job losses

Managing director Stephen Norman wouldn't confirm how many of Vauxhall's 93 retailers, which operate 326 retail locations in Britain, would be retained, but he did deny rumours that a third could go.

It comes after it emerged Vauxhall and Opel brands will "terminate all dealer franchise contracts with two years of notice".

Mr Norman said notice would be given on April 30, meaning all contracts will end on April 30, 2020.

In the region, there are Arthurs Vauxhall dealerships in Oswestry and Newtown, the Greenhous Vauxhall sites in Telford and Shrewsbury, Ludlow Motors and Evans Halshaw Vauxhall in Worfield near Bridgnorth.

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 majority of retailers who are currently with us will remain," Mr Norman said.

Mr 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.

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Vauxhall sales tumbled in 2017, with demand for its models down to 195,000 units, a decrease of 22 per cent on 2016.

In the face of this, Mr 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".

Mr Norman 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 Mr 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.

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Vauxhall’s dealer franchise restructuring could involve closer integration with its PSA Group siblings, Citroën, Peugeot and DS.

In a statement to customers and colleagues, Peter Hughes, general manger of Ludlow Motors, said: "Many of you will have read that all Vauxhall franchise contracts have been terminated with immediate affect. It has been necessary to do this for both legal and operational reasons.

"Over the years this is a similar process to that which has been followed by a number of other manufacturers.

"As far as we are concerned it is business as usual and Ludlow Motors will remain a substantial partner within the wider Vauxhall PSA Group for many years to come."

James Pugh

By James Pugh
@JamesP_Star

Shropshire Star Business and Farming Editor.

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