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Peugeot is likely to axe about 26 dealers

Peugeot plans to cut its 266-strong network, with around 26 dealers being given notice of termination.

Rod Philpott, director of network development, said Peugeot was looking to have 250 UK sites and with new dealerships and terminations, it would balance out to around this number.

He added that it was impossible to pinpoint why dealers have been terminated.

“It could be they didn’t sell enough cars, or they weren’t good with customers or property issues. It’s not fair to generalise.”

The carmaker issued its whole dealer network with contract termination letters last month as a requirement for its fixed terms contracts which come up for renewal on May 31, 2010.

Peugeot, which works differently to most manufacturers which use rolling contracts, started a fixed term contract with its network in 2003.

Under the contract’s term, Peugeot must issue its dealers with a year’s notice of termination.

Dealers will have their contracts extended for a further year to May 31, 2011 as updated European Commission legislation on Block Exemption has not yet been decided.

Once legislation is in place, new contracts will be issued for the network, said Philpott.

Dealers wishing to leave the franchise will be able to leave next year as the initial fixed term contract stated.

Only those 26 dealers who have been given notice of termination will not continue with the franchise after May 31, 2010.

David Manchester, Peugeot dealer council chairman, said: “We’re happy with how Peugeot has conducted the process and there has been full consultation with the dealer council.”

The moves by Peugeot follow on from fellow French marquee Citroën, which issued two-year termination notices to all its 640 sales, service centres and parts distributors at the end of May. It expects to reappoint most of them.

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