Europe: automakers cut the size of internally owned dealership networks image

Hard hit by the latest economic downturn, the automakers still feel the effects of the turmoil six years after it swallowed the region; still fighting to cut loses even as the car sales show early signs of recovery.

One target for the continuous search of cost cutting measures? The company-owned dealerships networks. The VW Group – Europe’s largest automaker and the second-biggest globally – also has the highest number of proprietary dealerships – 564 units, according to UK-based auto retail analyst ICDP.

“In most cases automakers’ ownership of dealers is largely a quirk of history, ” comments ICDP Managing Director Steve Young.

To put automaker owned retail outlets into perspective, Emil Frey – the largest independent car sales network – has 350 venues; while PSA Peugeot Citroen comes second among carmakers with 259 and Daimler third with 252. Renault is in fourth place with 209 dealerships but then the tally jumps down to just 56 and 43 for the fifth and sixth place, occupied by Ford and BMW, respectively.

The move to downsize the network is felt across the region sharply: VW is aiming to cut the number of retail outlets through a long-term strategy, PSA announced it aims to close or sell some of its venues in Germany and so did Daimler – though the latter would only sell part of the 213 Mercedes-Benz dealerships it owns at home.