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Citroën issues 640 termination notices

Citroën UK has issued two-year termination notices to all its 640 sales and service centres and parts distributors this week.

The manufacturer said the move is part of an ambitious sales
growth and enhanced customer care strategy – plus the need to safeguard profitability. 

Fewer dealers, doing a better job, making more money was the stated aim of sales director Simon Monahan.

Of Citroën’s 200 sales outlets, the majority will be unaffected.
But 20 have been told the carmaker is minded to end their contracts, unless in the two years they improve their customer care and/or sales performance against targets in 2009 and 2010.

Another 20 have been told the territory they represent is no longer viable. These will typically be the smaller centres where there is a city-based centre which will expand its reach. 

Of its 260 approved repairers, Citroën has warned 40 they have to improve their customer satisfaction scores or leave the network. 

Citroën’s 180 parts distributors have all been invited to remain part of its network.

New franchise contracts will be given in 2011 to all the dealers which Citroën wants to continue with.

Monahan said: “The network has known we were going to give notice to terminate contracts since last October. The message is simple: if you improve you can continue to be part of our network. Of the centres at risk I believe 50% have the ability to improve.”

It expects to have 180-190 dealers from 2011 with around 20 open points. The number of repairers is anticipated to fall to 240.

In terms of customer satisfaction, Monahan said Citroën was aiming for dealers to get a 90% completely satisfied score in its internal, monthly audits and repair centres 85%. Currently the score are typically 83% and 77% respectively.

Dealers will also be measured nationally against the JD Power survey (a top five position is expected) and the National New Car Buyer survey, where a top three position is expected. Repairers will be judged against the International Aftersales Customer Survey, where Citroën should be in the top three, believes Monahan.

Dealers with the best customer satisfaction scores will be allowed to use the new corporate identity, starting later this year, and to sell Citroën’s new premium DS range.

Citroën would not divulge details of the planned sales growth, but did admit it has “significant issues around lack of stock”.

Monahan and other senior staff have visited each dealership in the last few weeks ensuring there were “no surprises” when the termination notices arrived by recorded delivery this week.

The dealer council’s view

Citroën forewarned dealers of its plans. Even those facing the sack knew their fate, said John Miskin, chairman of its national dealer council. 

“Citroën has taken a pragmatic approach. It looked at every aspect of the business and discussed them with dealers,” Miskin added. “Even those that received the ‘Dear John’ letter would have expected it. They would’ve been helped by the profit improvement taskforce in the last year so it wouldn’t have been a surprise.”

Miskin hopes Gary Savage will continue the open communication with the council that Xavier Duchemin achieved. Subjects he aims to raise include a desire for more trading margin for dealers rather than cashback offers, and how to increase Citroën’s market share.

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