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Stellantis car dealers issued termination notices amid future distribution plan

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Stellantis will issue all of its UK and European franchised car retail partners with two-year termination notices as part of a reorganisation of its distribution networks ahead of the introduction of new Block Exemption rules.

Franchisees from the OEM giant’s Vauxhall, Peugeot, Citroen, DS Automobiles, Alfa Romeo, Fiat and Jeep franchises were alerted to the changes in a virtual conference calls with its UK boss Alison Jones and Vauxhall managing director Paul Willcox this morning (May 19).

Under the changes retailers will be issued with a new all-brands, multi-franchise agreement.

A statement issued by the OEM said: “In this context, sales and service distribution agreements of all Stellantis brands will be terminated with two year’s notice. 

“The new distribution network will be selected shortly after on the basis of key objective drivers and criteria.

“Retailer representatives will be invited to dedicated meetings to contribute to the development of the future Stellantis Distribution Plans and Strategy, which will pave the way for the new Stellantis Distribution Scheme, taking into account the BER framework as of June 2023.”

A spokesperson for Stellantis told AM that the Maserati brand is not included in the changes.

He added that retailers across the other brands’ networks could expect to receive letters outlining further detail of their new contracts in June.

Finalisation of the contracts is unlikely to be decided until after resolution of expected updates to the EU’s block exemption regulations, which are expected in 2023.

While Stellantis will continue to encourage multi-franchising across its UK retail network, he added that the newly-created retail contracts would “not necessarily” result in a reduced number of retail locations.

Details of changes to the Stellantis distribution model come less than two months after the Austrian Supreme Cartel Court banned its Peugeot brand from tying dealers payments to customer satisfaction surveys and from subsidising vehicle prices sold at its manufacturer-owned sales outlets.

The case arose following a long legal dispute between Austrian Peugeot dealer Buchl and PSA's Peugeot Austria, in which Buchl claimed Peugeot's national sales company was abusing its market power and in breach of competition law.

Stellantis said this morning that its vision was to promote a “sustainable distribution model with an efficient, optimised and effective Stellantis Distribution Network”.

It suggested that franchisees would benefit from a wider range of solutions and services as a result of the changes, stating: “Customers will be able to take advantage of a multi-channel approach with a wider range of services.

“Retailers and Stellantis Brands will have a new and efficient business model aimed at creating synergies, optimising distribution costs, increasing customer satisfaction. 

“This will offer additional sustainable business opportunities, including a wider range of services, product line-ups, financing and mobility solutions.”

In a statement issued via the London Stock Exchange this afternoon, Vertu Motors went on record to state that its board was confident that the reorganisation of the Stellantis dealer network announced would have "a positive impact on the group's operations and the scale of its activities".

Vertu currently operates 27 sales and aftersales outlets with Stellantis franchises and said that it was currently undertaking expansion of the number of outlets in cordination with the OEM.

Underlining the pace of evolution in its retail proposition as it launched its communicated its plans, Stellantis reiterated its assertion that 98% of Stellantis models will be electrified with 100% electrified in Europe by 2030. 

By 2025, 35% of Stellantis sales will be LEV and 70% by 2030, with a strong acceleration in this process and from 2023 as Stellantis aims to be at the forefront of the changes by allowing its network to adapt with a sufficient time-lead.

Its statement added: “The Stellantis brand’s product line-ups are evolving rapidly towards electrification in line with customer expectations and regulatory changes.

“Omni channels, including online sales journeys, have changed customer purchasing patterns. 

“This environment, together with upcoming BER (EU block exemption regulations) expected in 2023, will lead to changes to the current distribution contracts and standards.”

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