Italian carmaker Stellantis to end all sales and service contracts with European dealers

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Italian carmaker Stellantis to end all sales and service contracts with European dealers

NuERTINGEN, Italy, Oct 14 Reuters - Carmaker Stellantis will start a restructuring of its European Dealer Network, due to begin in June 2023 with its premium brands such as Alfa Romeo and Lancia, the company's European sales and marketing chief said on Thursday.

Stellantis, formed at the beginning of the year by the 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 an increase in online sales, and achieve promised post-merger synergies.

Stellantis will end all the current 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 for European Sales chief Maria Grazia Davino said, 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 said on an autos conference in Nuertingen, near Stuttgart. We are still building this up. We are going in the direction of agency model. As of June 2023, significant changes will be made to the EU Block Exemption Regulation BER which has given carmakers antitrust exemptions allowing them to manage franchise networks where they can dictate who sells their products and where.

Stellantis, which has 14 brands including Fiat Chrysler, Peugeot, Opel, Jeep and others, issued termination notice to all current sales and service dealers in June, but contracts will stay 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 said that 7% would be driven by savings on sales operations and general expenses.

The company did not yet detail what future contracts would look like, but highlighted 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 reduction of Stellantis Network in the EU.

Stellantis announced in May that the network restructuring will not involve dealers of Stellantis luxury brand Maserati and those in the United States, home to some of the group's most popular brands like Ram and Dodge.