Opel-Vauxhall to scrap dealerships as Peugeot cuts costs

FILE PHOTO: The brand name of Peugeot, part of French carmaker PSA Group, is seen at a dealership of the brand in Saverne, France, January 9, 2018. REUTERS/Vincent Kessler/File Photo

LONDON (Reuters) - Opel and its sister car brand Vauxhall will cut their number of dealerships as new owner Peugeot PEUP.PA continues to reduce costs at the firm it acquired last year in the face of sliding sales in major market Britain.

Peugeot parent company PSA bought Opel and Vauxhall last year when it acquired General Motors’ loss-making European arm and has been pursuing a restructuring plan to return it to profitability.

Vauxhall’s new boss Stephen Norman is tasked with turning around falling sales in what has traditionally been Opel-Vauxhall’s biggest market, where demand fell 22 percent in 2017, compared with an overall market decline of 5.7 percent.

“The requirements of the industry going forward and the requirements of the brands Opel and Vauxhall ... would not require as many retail outlets as the brands currently have,” Norman told reporters.

Consumers are increasingly going online rather than making multiple visits to showrooms.

The chief executive of a dealership group, speaking on condition of anonymity, told Reuters last month that Vauxhall wants to cut its showrooms by roughly a third to around 200 outlets to ensure its sales per outlet are “in a good place”.

Reporting by Costas Pitas, editing by Estelle Shirbon