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Renault reviews its network size

Renault is carrying out a review of its retail network that could see it reduce the number of franchised sales outlets.

The company has seen market share drop alarmingly from 8% in 1998 (180,000 units) to 5.28% (126,800 units) last year.

It expects a further fall to 4.5% this year after taking the decision to reverse out of unprofitable short-term rental deals and focus more on retail sales.

UK managing director Roland Buchara insists Renault needs to maintain its national coverage, particularly for aftersales, but he accepts that some parts of the UK have too much dealer representation while some dealers are over-facilitised.

“If the market falls we need to anticipate and review the size of the network in some areas,” he said.

“If the market falls significantly, the problem of dealer size will be a problem for all manufacturers.”

Renault has 240 main dealers and a further 60 retail sales points. Some sites might become authorised repair specialists.

Buchara said: “The average profit of our top 50% of dealers is 1.8% return on sales year-to-date. So we ask why some dealers are very profitable if others aren’t.”

He points to three key areas to focus on: upselling, LCVs and quality.

“My job is to review the ones that aren’t performing and understand why.

That will define the action we have to take,” Buchara added.

Every dealer has been audited as gold, silver or bronze performance under the Renault 20 review which started at the beginning of the year. Each has been given an action plan.

Renault has also adopted an action plan after assessing feedback from four dealer working groups which looked at overheads, marketing, finance and aftersales.

As a result, it has sped up bonus payments from 60 days to 28 days to help dealers’ cash flow.

It has also introduced non-productive members of staff in the workshop to reduce the administrative burden.

“Dealers will see the results from this action in the second half of the year,” Buchara said.

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