PARIS - Peugeot and Citroen plan different strategies for their separate dealer networks.
Peugeot wants a smaller, leaner network. But Citroen sold 30 percent fewer cars than Peugeot in 1996 and wants to maintain its dealer body to defend its 5 percent share of the European market.
Peugeot will reduce its dealer count by 5-10 percent in the next few years, said Frederic Saint-Geours, deputy general manager in charge of sales.
Across Europe, Peugeot had 8,358 sales outlets in 1996, including factory-owned dealers, independents and agents. Citroen had 8,887.
In Germany, the number of Peugeot dealers has fallen by 15 percent in the past three years. 'It will go on,' said Saint-Geours. 'We have a lot of work to do there.'
Peugeot also wants to make its distribution system more efficient and more profitable. 'Our target for European dealers is a 1.5-2.0 percent ratio of net profits to sales. That is already the figure in the UK,' he said.
'Significant economies of scale can be made with everything the customer does not see: logistics; spare parts; new- and used-car inventories; and common facilities,' said Saint-Geours.
For this reason Peugeot wants dealers to control 2-4 adjacent territories each. Peugeot also wants dealers to share some facilities. It has opened a FF15 million ($2.6 million) body shop in Nanterre, west of Paris. It will be shared by five Paris area factory dealers.
Peugeot expects dealers to be profitable in all areas of their business, including 'used cars, servicing and spare parts, not just in new car sales,' said Saint-Geours.
Citroen has been more conservative. Although it sells 30 percent fewer cars, it has 500 more retail outlets in Europe than Peugeot.
'Our dealer network in Europe has remained stable over the past three years, with around 1,500 outside France,' said Claude Satinet, Citroen deputy general manager in charge of sales. 'We also want to keep agents in small towns.'