Vauxhall dealers fear one in three car showrooms will be axed

Vauxhall car dealers fear one in three showrooms will be axed over the next year, it has been reported.

PSA, the French parent group of the UK marque, is embarking on a major shake-up of the business that could result in about 3,800 jobs being lost.

Dealers have told trade magazine Automotive Management they would be forced to make sales, workshop and administrative staff redundant as part of the cull.

MORE: Vauxhall to cut 250 more jobs at Ellesmere Port

The reported move is part of plans by PSA to make savings of £1billion.

“PSA Group has already implemented savage cuts in its manufacturing operations and it looks like that is set to continue in retail. A third of dealerships will go,” one dealer told Automotive Management.

“This is action that the brand needs to take quickly to maintain profitability in the network. It will happen within the next 12 months.”

A Vauxhall spokesman told Yahoo Finance UK that the company “has no plans to close any dealerships”.

MORE: Peugeot CEO Tavares does not want to close UK Vauxhall plants – union

In an official statement, the carmaker said: “The Opel/Vauxhall PACE! plan is improving the efficiency of the business in all areas.

“Within the plan, the go-to-market strategy is being carefully reviewed, including the contractual framework with dealers.

“We have no further comment to make at this stage.”

The future of Vauxhall, like that of the rest of the UK automotive industry, is intrinsically tied to Brexit.

Carlos Tavares, chief executive of PSA, which owns Vauxhall, Peugeot and Citroen, has spoken in recent weeks of the “big concern” about the lack of clarity over the UK’s future trading relationship with the EU.

MORE: Vauxhall cuts 400 jobs at Ellesmere Port factory

He said investment decisions were being put on hold – and that was having a major impact on the future of plants such as Ellesmere Port in Cheshire.

PSA said last year it was committed to keep making the Astra at Ellesmere Port, but it also announced in January that it was cutting 250 jobs at Ellesmere Port in addition to the 400 it announced in October.

Vauxhall employs about 4,500 people in the UK, with about 1,800 at Ellesmere Port. The company also has a factory at Luton, which makes vans.