AM has spoken to a number of dealers who claim the network is unhappy with targets set for new car sales and customer satisfaction. Although the top quartile is profitable, the vast majority of dealers are barely breaking even, and a quarter made losses of £200,000 last year, one council member told AM.
“The network is in a state of collapse. This is the blackest mood that we’ve known in the franchise,” he said.
At a heated meeting between the NDC and Peugeot UK management, the NDC said it would disband if the carmaker did not listen to its views. It accused the carmaker of imposing targets rather than negotiating. A senior executive from one large dealer group reportedly told Peugeot UK managing director Pierre Louis Colin that the franchise was “a shambles”.
The NDC source said: “The franchise has probably the best line-up of vehicles that we’ve ever had but our business is being directed by people who are behaving like headless chickens.”
However, Peugeot UK dealer development director Rod Philpot insisted that measures have been taken since the meeting to address some concerns, such as changing promotional activity. Two communiqués have been issued to keep the network informed.
Philpot added: “For March, which is clearly a very important month for registrations, we’re paying out bonuses on a weekly basis rather than at month end.
“It’s a small thing but it’s important for dealers to have good cashflow in that period.”
Three weeks of regional dealer forums began this week, with Peugeot’s senior management listening to dealers’ views of targets and the bonus structure.
“The commercial objectives of people working together should be the same, but there have got to be incentives or some form of encouragement,” Philpot said. “I don’t think this is much different to the way the world is in this industry.”
Dealers have complained to AM that they have been set targets for double-digit growth, although for some their local market shares are declining. Their profitability is heavily linked to new car volume bonuses and CSI standards, such as obtaining email addresses for 50% of buyers or remaining complaint-free in aftersales.
Another Peugeot dealer said: “We can understand challenging targets, but these are unachievable.”
Some dealers have vowed to put their focus on used car sales at the cost of new registrations, despite the imminent plate change in March.
The dealer added: “Every programme that the manufacturer brings out has taken more money away from dealers’ profits. We work very hard for a living and as entrepreneurs we will have to concentrate on where we can best make profit, which is not in new car sales.”
NDC chairman David Manchester downplayed the views of some council members. He insists there is a future for the NDC, and said he expects to gain a better gauge of dealers’ opinions after the regional forums.
After a tough final quarter of 2007, dealers raised some concerns with Peugeot which the carmaker is addressing, he added.