Citroen is expecting to lose up to 25% of their franchised retail network over the next year.
Karl Howkins, Citroen managing director, said the current network average return on sales was 0.1% however the top quartile make more than 2.0%.
“The second quartile is making around 0.6-0.7% and the third is just about breaking even, but the fourth quartile is completely off a cliff,” he said.
“We’ve told those dealers they’re not dead, but they’re on life support. They’ve got to focus on the basics to get through it.” He has seen some franchised dealers turn their fortunes around but adds: “There are other dealers that we’ve given up with, and they’re going to die.”
One year ago, Mr Howkins said the average RoS was at 0.6% and that “within two years I want the network to be at 1.5% return on sales”.
Over the last 18 months Citroen have reduced their franchised retail sites from 158 to 145. Mr Howkins believes this will reduce further to around 130 sites, although there are also some key areas he’d like to fill. He asserts the way forward for many Citroen dealers, will be to go multi-franchise. This could be with brands either within or outside the PSA group.