French carmaker Renault is downsizing its UK retail operation in 2012, discontinuing the sale of some models and reducing its dealer network from 190 to 135 retailers.
The restructure is aimed at taking both Renault UK and its dealer network out of the red by refocusing on the most-profitable cars and vans, and follows managing director Thierry Sybords comment that the system as it is is not making a profit.
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Mike Gale, manager of product affairs for Renault UK, explained that the manufacturers captive finance partner RCI Banque, part of the Renault Group and not Renault UK, would not be affected beyond the predicted fall in sales volume and proposals next year.
Though both franchised and Renault-owned dealerships will be affected by the restructure, Gale said the majority of cuts would come from franchises and Renault-owned dealerships in major cities would not be affected.
By the end of 2012 it is expected almost 70% of Renault UKs retail dealers, and 30% of its main dealers, will either be converted to service or aftermarket providers or shut.
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By GlobalDataSybord said that 2012 would be a transitional year during which, Renault UK forecast, sales will fall by a third as a consequence of the action but proceed to recover and surpass current levels in 2013. The year will also see the launch of several electric vehicles under the ZE brand and the introduction of the Dacia brand in November.
From the beginning of February, sales of the Laguna, Espace, Wind Roadster, and Modus models will be wound down.
Sales of Kangoo cars will also be discontinued although the Kangoo Van ZE will launch Renaults roll-out of four electric vehicles in the UK. Eight of the 13 Renault-owned dealerships, as well as several franchises, already have staff trained and on site to help with sales and after-sales services for electric vehicles.
Renault is also pulling out of less-profitable fleet business such as the Motability range or large fleet deals with expected discounts, despite the growing reliance of the car industry on the corporate market.
The departure of Ian Plummer as commercial operations director, effective 31 December is totally unrelated to the restructure, according to Gale. His place will be taken temporarily by Bob OReilly, head of franchising and network development.
richard.brown@vrlfinancialnews.com
