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Peugeot plans cuts in UK retail network

Peugeot plans to cut its UK retail network by around 30 outlets by 2010, in order to make the remaining dealers more profitable.

It is also planning changes to its wholly-owned dealer group, Robins & Day, ranked 15 in the AM100. Robins & Day accounts for 23% of Peugeot’s UK sales. However, 10 of its sites are not profitable, largely because Peugeot does not own the freehold.

Overall, the retail group breaks even.

A review of the 34-outlet group has been introduced by Pierre Louis Colin, Peugeot UK’s managing director. Reports suggest four Robins & Day outlets will be sold.

“Some Robins & Day companies would be better in the hands of private investors,” Colin admitted. The group may also add four wholly-owned dealerships in major cities. Land has already been bought in Manchester for one dealership.

Colin has also revealed that 10% of Peugeot’s 300-strong retail network will be cut by 2010, when most contracts end. That follows a recent internal review of the network, which concluded that its profitability would improve with fewer dealers.

“By May 2008 we will have to say which dealers have to go,” said Colin.

Peugeot has revived market share and dealer profit-ability in the UK in the first half of the year, according to Colin.

The introduction of the 207 and 308 is expected to drive market share beyond the present 6%. Sales last year were at 144,000 compared with 206,000 five years ago when the network numbered 350 outlets.

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