Renault dealer and product cull as network fights for profit, AM | Page 2

Renault dealer and product cull as network fights for profit

21/02/2012 in News, Car Manufacturer News

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Renault dealer and product cull as network fights for profit

The reorganisation will be mirrored within Renault UK’s own operation.

Sybord said the business, which has not been in profit since 2007, had a strong action plan to reduce its fixed costs appropriately.

Its 200 staff will have heard by January 26 of the restructuring of head office, which is expected to result in 60 job losses.

One of the changes will see a merger of its commercial and fleet/LCV departments.

Ian Plummer, its commercial operations director, resigned in December.

His replacement is Darren Payne, previously director of fleet and commercial vehicle operations, who has been given the new role of sales director, heading the merged department.

Sybord said: “We need to do this now or it will be too late. It’s something I feel 100% sure will work.

"It will be difficult, but it’s time to reduce fixed costs, and our network is just too big.”

For 2012, described as a “transition year”, Renault UK forecasts its registrations to total 51,700 units, a drop of almost 32% from its 2011 result.

Some of this loss will be in the retail sector, as the network is restructured, but the bulk will come from a 90% withdrawal from Motability and rental channels.

The brand will maintain its core fleet car sales at around 10,000 units and its van business is also to be sustained at around 17,000 units.

Dealers will be expected to target local prospective small and medium fleet customers. It expects residual values and desirability to improve on following its pull-back from heavily discounted short-cycle business.

Four Plus commitment

Further improvement is expected as from February 1 it introduces a ‘Four Plus’ commitment – four years/100,000 miles warranty, four years/48,000-miles free servicing on cars and four years/80,000-miles free servicing for vans, four years roadside assistance and a four-year finance package.

For 2013 it forecasts a significant upturn in volume, led by the arrival of the new Clio 4 plus 12,000 pre-dicted sales of the new retail-focused Dacia models, to restore registrations to above 75,000 units.

By this point, the entire UK network will be selling Renault cars and vans, the electric vehicles in its ZE (Zero Emission) range, plus the Dacia models.

The investment required for Dacia is minimal – around £3,000 for signage and tooling – as it will occupy “a corner of the showroom”, said Sybord.

On the European mainland retailers introduced it with existing resources, including sales executives, until it was established.
Dacia, with its cars deliberately low-priced, will be a “no-haggle” retail-focused brand with a three-year warranty.

Many of its customers are expected to have previously been used car buyers, attracted by the low entry price for new car ownership and security.

Sybord added: “During 2012 we plan to move the Renault brand up in terms of customer perception and bring in Dacia below it. Our electric vehicles, or ZE brand, will form a halo above.”

Sybord insisted the ZE’s range is to make money, not just be a technical showpiece.

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Renault Retail Group

Renault Retail Group is a national network of over 20 automotive dealerships and sells one in every four Renaults in the UK.

It is 100%-owned by Renault and was formed in 1996. To-date the group has sold over 350,000 vehicles in the UK.

Annual turnover in 2010 was £513 million with full-time staff numbering more than 1,000.

In 2010 the group appointed Stuart Walker as managing director from the post of deputy MD, succeeding Ian Plummer who was promoted to Renault UK’s director of commercial operations. Walker also heads up the group’s Nissan operations and its used car franchise Autoworld.

The group suffered particularly during the 2008 recession, with sites closing or undergoing restructuring as it sought to streamline the business wherever possible.

Plans to redevelop its flagship London West site at a cost of £9 million were also shelved.

RRG is also a member of online used car sales website established by Perrys, Vertu Motors and Lookers bosses Ken Savage, Robert Forrester and Peter Jones.

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Comments (1)

kevthebass - 142 weeks ago

So dealers that survive this cull are expected to invest £000s in a slightly different shade of grey showroom tiles etc. When will manufacturers realise that this spend will not bring in one single extra customer nor improve customer service levels which depend on people and process. Funny how recently during a week touring France most french Renault dealers appear not to meet the UK franchise standards from 20 years ago never mind the current requirements. My local BMW Motorcycle dealer, of 14 years, was told by BMW to relocate 18 miles to a city location, spending £2.5 million in the process. They didn't have the cash, want to incur the debt or see the need for it so they were terminated. The "new" BMW Motorrad dealer is tagged onto a car dealership and has the same sanitised totally disinterested customer experience as most car dealerships. It's people and enthusiasm that make the difference NOT glass palaces.

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