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Gary Johnston

EIGHT Peugeot and Citroen dealers have been handed termination notices as new distributor Inchcape Australasia winds up a series of dealer meetings around the country.

The number is far short of rumours – some saying 85 per cent of Peugeot and Citroen dealers would be terminated – but does not include those who decided to hand back the franchise. These include two Perth dealers and one in Adelaide.

Dealers who attended the national meeting were told that the reduction in dealer numbers was driven by the need for each business to be profitable.

A source said they were told it was “not economically viable for the current dealer numbers to continue”.

Peugeot and Citroen recently had more than 40 dealers selling 195 vehicles a month.

The source said he was told that: “You can’t have a viable business operating at five vehicles a month.”

While the situation looks grim for some of the dealers who have received terminations, the future may be brighter for those continuing.

PCA has announced that future product – including the 5008 seven-seat SUV and the expansion of the Citroen light-commercial vehicle range – could lift sales to the point where new dealers would be needed.

The source said he was told that PCA has a target of 6000 vehicles in 2018, up from the estimated 3500 vehicles for calendar year 2017.

Dealer numbers would be increased when the two brands get to about a combined 10,000 sales a year, he was told.

Inchcape Australasia CEO Nick Senior outlined to GoAutoNews Premium in August that the plan was for all Peugeot dealers to also become Citroen dealers.

At the beginning of this month, of the 65 Peugeot and Citroen dealers, only 18 sell both and only eight are exclusively Citroen agents.

That could spell the end of the franchise for Bill Bunting’s Continental Cars in Sydney’s Roselands that has been selling and repairing Citroen models for 59 years.

Mr Bunting said he has heard of the roll-out of terminations and, although he hasn’t received a notification told GoAutoNews Premium: “I don’t feel safe”.

“I have only heard that Adelaide, Perth, Canberra and Hobart dealers have received notices,” he said.

Continental, which sells only the Citroen brand, said Inchcape wanted dealers to sell both Peugeot and Citroen.

“I believe that if the model isn’t broken, as in our case, then it doesn’t need to change.”

In Canberra, Peugeot of Canberra dealer principal Domenic Alvaro said he has been given a termination notice from PCA but is mystified why he cannot represent the brands after 25 years.

“I have had no discussion and no one has visited me to explain why I am no longer the Peugeot and Citroen franchisee,” he said.

Continental, which sells only the Citroen brand, said Inchcape wanted dealers to sell both Peugeot and Citroen.

“I believe that if the model isn’t broken, as in our case, then it doesn’t need to change.”

In Canberra, Peugeot of Canberra dealer principal Domenic Alvaro said he has been given a termination notice from PCA but is mystified why he cannot represent the brands after 25 years.

“I have had no discussion and no one has visited me to explain why I am no longer the Peugeot and Citroen franchisee,” he said.

“It’s all going to the local Subaru dealer.

“I’m annoyed that a lot of dealers, including myself, have stuck by Peugeot and Citroen in some poor times when we were selling three or four cars a month.

“In the period 2002 up until about 2007, we were selling up to 30 a month. Then the GFC came along and we went back to three or four cars a month.”

So we have seen the good times and the bad times.

Mr Alvaro said he would continue to look after his customers in parts and servicing and would expand his busy used-car department.

Allpike Peugeot Citroen, owned by AHG for the past nine years after decades with the Allpike family, was also given notice.

The dealership was one of the first in Australia to build its showrooms based on the (then) new corporate identity of Peugeot’s “blue box” and a separate “white box” for the Citroen showroom.

The showrooms are on a busy corner on Osborne Park’s Scarborough Beach Road, which is about 5km from the Perth CBD and has nearly all the major franchises represented.

It is believed that AHG will exit its lease on the site – owned by the Allpike family – and that it could be the new location for The Regent Group’s Renault showroom, relocated from 400m down the road.

The second Perth Peugeot dealer, DVG Prestige Melville, handed back the franchise earlier this year.

In announcing the new plans in August, Mr Senior said: “The key element is that we are moving to a business model where the Peugeot and Citroen dealers will be together.”

“That will help in terms of profitability. I would like to get to – and this is more a medium to long-term issue rather than something in the short term – dealers in the city selling 75 units per month and those in the provincial areas selling 30 a month.

“Now that’s a way off in terms of timing but we are way off those numbers at the moment.”

Peugeot and Citroen this year will roll out an increased product range, including the Citroen C3 and Peugeot 308 small cars, and the Peugeot 3008 and 5008 SUVs.

It is believed PCA is also considering launching electric vehicles in Citroen’s light-commercial range into the Australian market.

By Neil Dowling

Peugeot 3008

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