9:00 am, January 18, 2012
PEUGEOT’S managing director has revealed he won’t follow Renault in slashing its dealer network by a third.
Speaking to Car Dealer, recently-appointed Peugeot MD Tim Zimmerman said his firm is looking at ways of cutting costs – but they won’t come at the expense of axing its dealers like French rival Renault.
‘Every manufacturer needs to be looking at its strategy for two key reasons’ said Zimmerman.
‘Firstly, emerging markets are exploding and European manufacturers have to invest in these. Secondly, mature markets are getting more difficult. In reality, all manufacturers are doing this. We’re looking at how to cut costs.’
In October it was announced that Peugeot Citroen planned to cut 6,000 jobs to save 800m euros in 2012. ‘We are also investing 3.6bn euros in developing markets and we need to finance this – so we are looking at how we need to cut our cloth in Europe. But that doesn’t involve cutting our dealers,’ said Zimmerman, ‘although we are looking at ways of streamlining our business.’
STREAMLINING
Zimmerman explained how the French firm is reducing costs for its dealers by cutting unnecessary expenditure.
‘It’s a lean management approach, but not at the cost of offering value to customers’ he said. ‘We are looking at reducing the number of demonstrators dealers have, for example. By optimising the use of them, dealers can save £10k a year as demonstrators are the biggest cost to dealers after premises and salaries. We are being practical in this area – we are already providing customers with online demonstrator booking.’
Zimmerman also explained along with cutting expenditure, Peugeot is freezing costs for dealers. Despite national inflation of five per cent, Peugeot is freezing charges to the network ‘wherever possible’ such as training.
Neil Moscrop, Peugeot UK’s sales director, added: ‘If you anticipate growth in the future, then you will need those dealers. Our dealers believe the Peugeot investment still remains a good one.’
The next issue of Car Dealer features Zimmerman along with nine other key automotive influencers discussing 2012 – click here to subscribe and to get hold of the issue
