Carmaker Stellantis to start restructuring of European dealer network

Carmaker Stellantis to start restructuring of European dealer network

NUERTINGEN, Germany Reuters - Carmaker Stellantis will start a restructuring of its European dealer network, due to begin in June 2023, with premium brands like Alfa Romeo and Lancia, the company's european sales and marketing chief said on Thursday.

Stellantis, formed at the beginning of the year by merger between Fiat Chrysler and Peugeot maker PSA, announced in May that it would completely restructure its European dealers network as it seeks to adapt to changes in the industry brought by electrification, including a boom in online sales, and achieve promised post-merger synergies.

Stellantis will end all currently affiliated sales and service contracts with European dealers for its 14 brands, with effect from June 2023.

The company is still exploring options for how to structure future relationships with dealers but is moving towards an agency model, said the European sales chief Maria Grazia Davino, referring to an arrangement where carmakers take more control of sales transactions while dealers focus on handovers and servicing, no longer acting as the customer's contractual partner.

Davino's model was still building on to this, Davino said at an autos conference in Stuttgart, near Nuertingen. We are going in the direction of an agency model. As of June 2023, significant changes to the EU Block Exemption Regulation BER have granted antitrust exemptions to carmakers enabling them to operate franchise networks where they can dictate who sells their products and where.

Stellantis, which has 14 brands including Fiat Chrysler, Fiat Chrysler, Peugeot, Opel, Jeep and others, issued termination notices to all current dealers in June but contracts will remain valid for another two years.

The world s fourth largest carmaker has promised more than 5 billion euros $6.1 billion in annual synergies and 7% of these would be driven by savings on sales operations and general costs.

The company did not at the time demonstrate what future contracts would look like, but indicated that the decision for a change was taken in anticipation of growing online sales and new market players such as e-commerce platforms.

It is not yet known whether this process will lead to a drastic reduction of Stellantis network in Europe?

Stellantis said in May that the network restructuring would not involve dealers of luxury brand Stellantis Maserati and those in the United States, home of some of the group's popular brands such as Ram and Dodge.