10:47 am, January 24, 2023
The boss of Stellantis in the UK says the firm remains committed to its retailers ‘long-term’ and has no plans to ‘aggressively cut’ its number of partners.
Speaking to journalists, Paul Willcox, senior vice president and group managing director at Stellantis, moved to assure partners that their future with the company was safe.
He said that ‘retailers will always have a part in our business’ but admitted that partner count would naturally fall over the coming years.
The former Vauxhall boss said Stellantis would not take on any new retail partners and look to grow relationships within its existing network.
At present, Stellantis has 177 partners in the UK representing the likes of Peugeot, DS, Citroen, Alfa Romeo, Fiat and Abarth.
However, Willcox conceded that ‘theoretically in an ideal world’ the company would prefer to have just 40 partners.
‘An important thing that we need to shout very loud is the fact that we are at Stellantis are committed to retail representation into the long-term,’ said Willcox.
‘We don’t see a disruption in the retailer model in terms of the fact that we will need retailers and because of that we will need to we need to ensure that there is viability and sustainability in networks.
‘In our overall network plan we have two objectives. The first is to offer a great customer experience and second to have a viable business opportunity for us and for our partners.
‘We will lose a number of our investors, not only through through attrition but also through consolidation.
‘You might hear from our retail partners, a number of 40 but I stress that is a theoretical number. If you had a perfect world and a clean sheet of paper and you said how do you map the UK for Stellantis, the theoretical plan will be to have 40 partners.
‘Of course we want to improve our efficiency and our expectation over time is we will reduce the partner count.
‘However, every partner that we have today, that is currently has one of the 177, has a future for with the business. There is no plan to aggressively cut the number of investors.
‘What we will do is manage the business based on performance.’
Agency model has ‘significant advantages’
Another topic discussed by Willcox was Stellantis’s plans when it comes to adopting agency sales, which the company refers to as its ‘retailer model’.
The firm’s commercial brands, as well as Alfa Romeo and DS, will adopt the model in the UK from the start of 2024.
Last year, Stellantis was accused of ‘kicking the agency model down the road’ when it announced a delay of six months.
Willcox, however, insists it is still full steam ahead when it comes to agency sales and believes the system has advantages to all parties.
He said: ‘We could spend hours talking about retailer model, which for us is the way we term agency.
‘Obviously there are some significant advantages. The first one, we think it’s a positive step for the customer.
‘When you move to one price, one offer and one customer journey, whether it’s online or offline, it becomes simpler for the customer and takes stress out of the journey, which is good.
‘We think it’s a win for the retailer, particularly the way we’re building it. I can’t talk for how our competitors may or may not do it, but for us, retail will be a simpler business and will focus on delivering a much more predictable remuneration scheme and therefore much more stability in terms of profitability.
‘Our expectation is it’s a win for the retailer and it’s a win for us as well because we will obviously manage the relationship with the customer better and that will create more stability in terms of pricing.’
Stellantis targeting ‘responsible multi-franchise’ arrangements
Last week, Stellantis retired the Robins & Day name after 100 years as it looked to bring its brands together as part of new multi-franchise arrangements.
The dealer group was rebranded as Stellantis & You, Sales and Services, heralding the start of online sales for its used car portfolio.
Willcox has now given more details on the firm’s multi-franchise plans and pledged not to ‘cost cut our way to success.’
‘Cost efficiency is not about cutting our way to success,’ he added.
‘In my career, I’ve been around quite a while and it’s very easy to fall into the trap of cutting yourself to success and to survival. That’s often a mistake.
‘From our perspective, we want to be smart in the way we manage that, we are going to push to manage, on one foot first of all, more responsible multi-franchising within Stellantis.
‘We are encouraging proliferation of multi-franchising across the network within the Stellantis group and we want to encourage partners to take on that opportunity.
‘We’re also looking at overall cost efficiency and the way we’re going look at that is through harmonising the way we operate, which comes down to our pricing model.
‘We want to reduce complexity within the business and if we can do that it’s very clear that we will reduce costs.’
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