Stellantis to optimise networks ahead of Block Exemption
19 May 2021
In a major reorganisation of its retail networks, Stellantis is issuing all retailers in the UK and EU with termination notices and is planning to re-appoint an “optimised” number under a new single contract for an all-brand multi-franchise agreement.
Stellantis, which operates brands including Vauxhall, Peugeot, Citroen, Fiat and Jeep, is making the move ahead of the new Block Exemption regulations which are due to come in on 31 May 2022 for the general rules and 31 May 2023 for the motor rules.
The changes follow a court defeat for Stellantis in a case with an Austrian retailer over targets and margins linked to customer satisfaction scores.
A spokesman for the manufacturer said: “Stellantis’ vision is to promote a sustainable distribution model with an efficient, optimised and effective Stellantis Distribution Network. This will represent the brands locally and ensure the development of sales and aftersales activities with a focus on top level customer satisfaction.
“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.”
The spokesman added the UK networks would remain “substantially the same” but declined to add what that meant in terms of sales points or sales partners.
The manufacturer also hinted it will reduce the minimum showroom size requirements as the digital portion of the consumer sales journey increases.
Having added Vauxhall (and sister brand Opel) to the manufacturing group in 2017 and the FCA brands including Fiat, Alfa Romeo, Abarth and Jeep to the group in at the start of this year, Stellantis now has 923 new car sales points in the UK.
The announcement by Stellantis UK boss Alison Jones to all UK and EU retailers this morning (19 May) will leave those retailers operating Stellantis franchises with uncertainty until the end of the month and could impact share prices of listed groups which may force them to make City statements about the issue.
UPDATE: As predicted by Auto Retail Agenda, Vertu Motors PLC has issued a statement on the London Stock Exchange about its Stellantis franchises.
A spokesman for Vertu said: “The group operates 27 sales and aftersales outlets with Stellantis franchises which include Peugeot, Vauxhall, Citroen, DS Automobiles and Jeep. The board notes the recent announcement by Stellantis regarding its intention to issue two years’ notice of termination of their current franchise dealer agreements on 31 May 2021. The group has a strong relationship with Stellantis and performs operationally at a high level for its brands.
“In coordination with Stellantis, the Group is currently undertaking expansion of the number of outlets operated and the board is confident that the reorganisation of the Stellantis dealer network announced will have a positive impact on the Group’s operations and the scale of its activities.”