...But it's planning to open the good ones back up again.
Vauxhall/Opel is ending all of its agreements with dealers as part of a huge reshuffle, the company's first refranchising effort since 2013.
Two years' notice will be given to dealers on 30 April, meaning that all contracts the company has with its dealership network will be ended by 30 April 2020. Despite the seemingly drastic move, Vauxhall at least is expected to retain most of its franchised dealers. The company currently has 93 different retailers operating at 326 locations across the country.
'The majority of retailers who are currently with us will remain,' Vauxhall managing director Stephen Norman said during a recent media conference call, refusing to elaborate on exactly how many will be retained.
Vauxhall's restructuring of its franchise network comes down to the company's struggling sales. It faced years of losses under its previous ownership by General Motors. New owner Peugeot, which faced near-bankruptcy during the financial crisis of the late 2000s, is aiming to turn the company around like it managed itself.
'We believe some dealers need to make more money,' said Norman. Last year Vauxhall sales fell by 22 percent – down to just 195,000 units. New dealers will be chosen for their record with profitability, 'including used car sales and after sales, as well as customer satisfaction,' said Norman.
Surprisingly, Norman doesn't think jobs will be threatened, despite the possibility of some dealers closing: 'I am not expecting any of these people’s jobs to be threatened,' he said. As well as changes to its retail network, Vauxhall is also overhauling its commercial and pricing policies, which could mean an end to excessive fleet sales and cheap deals galore as the company seeks to build profits back into each car.