Vauxhall plans to reduce its number of franchise dealers by about a third as consumers change the way they buy cars.

PSA, who bought Vauxhall last year, plans to reduce the total from 326 to about 200. Their plan is to return the loss-making Vauxhall and Opel businesses to profitability.

Vauxhall sales plunged by more than a fifth last year –  worse than the overall market decline of 5.7%.

Stephen Norman, managing director, said it and sister brand Opel “would not require as many retail outlets as the brands currently have. Competition for car sales has become fiercer in the past five years, and more consumers are expected to buy cars online in the future”.

Mr Norman did not expect job losses among the 12,000 people who work for the dealer network.

The former PSA executive was appointed as Vauxhall boss in January with a remit to resuscitate the brand.

The manufacturer began informing its dealership network on Monday. Some will be invited to renew their franchises. Those that survive are expected to become more closely integrated with PSA’s other brands, which include Citroen and Peugeot.

Vauxhall sold 195,000 cars in the UK last year, reducing its market share from 9.3% to 7.7%. Sales in the first three months of this year fell by 18%.