Some in the network believe that if the crisis is not resolved soon, businesses will begin to fail. Dealers are expected to put Citroen UK managing director Alain Favey under intense pressure at the brand’s national dealer conference in Telford, Shropshire, on Tuesday.
Marc Raven, Citroen UK public affairs director, says: “We do have issues about profitability and it will be top priority at the conference. But this is not exceptional to Citroen – this is a wide-spread issue with other volume manufacturers.”
Since Favey took the helm in 2000, Citroen’s UK sales have climbed well above 100,000 units thanks to enticing consumers with substantial cashback offers and no-VAT price-cuts.
However, sales dipped last year. Figures supplied to AM indicate that average dealer profits in the franchise have fallen from £104,700 in 2000 to £29,800 in 2004. Last year, more than a third of the dealerships in the network reportedly made a loss.
In a letter to the network, which AM has seen, Citroen National Dealer Council chairman John Miskin reveals the outcome of a recent seven-hour meeting, at which Citroen’s franchised dealers, authorised repairers and parts distributors discussed their concerns.
“This meeting was extremely important, as the Citroen network is now experiencing profit levels that cannot be sustained, and worst of all, this is after the first quarter that is normally the best period of the year,” states Miskin in the letter.
“Drastic action is called for, and Citroen UK realises that the NDC must work very closely with them in order to turn the situation around,” he continues.
A working party was set up following the meeting to come up with proposals that would heal the rift between struggling dealers and their Slough management. The outcome is expected to be announced at the conference.
One Citroen dealer, who asked not to be named, says: “Business failures are imminent.”