Renault Group UK has told AM that its latest steps to reduce the number of car dealerships that it wants in its dealer network will have minimal impact on car buyers.
It is expected to shrink the 144-site retail network, which represents Renault, Dacia and Alpine, by around 20% by the end of 2025, with a focus on reducing the number of partners it deals with and securing profitability for the dealerships which remain.
It will split from eight current franchise investors entirely.
Unlike carmakers Stellantis, Volkswagen Group and Mercedes-Benz which are reshaping their physical showroom networks as they introduce agency contracts and sell new cars direct to consumers, Renault is sticking with a franchise model for longer as global boss Luca De Meo fears that giving dealers a small fixed margin while the OEM controls the price is “risky”.
The carmaker knows that profitability is key to the long term sustainability of the franchised network, and in 2019 it revealed to AM that it was considering a “hub and spoke” market area approach.
This week, in a statement, Renault Group UK told AM: “In our first major change to Renault Group UK’s dealer network since 2012, we have adjusted our sales site coverage to ensure the best possible, consistent, experience for our customers, optimise our performance and provide a positive business relationship for our partners.
AM understands the changes reduce UK coverage by just one percentage point.
Earlier this year at the group’s On R Festival for its global distribution network De Meo stated: “We are changing the Renault Group and its brands. To make it happen we must count on each women and men of our distribution network.
“For me, the retailers are a very strategic asset. There is no substitute for their passion and physical presence, on the ground, next to our clients.”