One Citroen dealer, who wished to remain anonymous, said a “crisis meeting” had been held between the brand's National Dealer Council and Citroen UK
The dealer called for Citroen to explain its strategy to “turnaround the impending fatal financial performance of the dealer network” which the dealer attributed to the brand's aggressive discounting policies of the last three years — including cutting VAT costs to customers on new car sales.
The dealer claimed Citroen's high volume strategy had not improved profits for retailers
and added that the car maker had used block exemption legislation “to force dealers to over invest in oversize showroom facilities based on volume forecasts that have not been achieved”.
In a letter to the network recieved by Motor Trader, John Miskin, Citroen national dealer council chairman, said the NDC had met Citroen UK at its headquarters in Slough late last month.
Calling for “drastic action” on diminishing sales returns Miskin said: “The Citroen network is now experiencing profit levels that cannot be sustained and this is after the first quarter that is normally the best period of the year.” He said the council
would draw up proposals to improve profitability which, if approved by Citroen, would be announced at the National Dealer Conference last week.
Citroen UK was unable to comment on the conference but a spokesman said: “Profitability is an issue for all the volume manufacturers at the moment.”
The brand said it would continue with its cashback offers that had “proved to be very successful”.
After several years of growth Citroen's sales in the UK fell by 10 per cent to 106,000 in 2004, according to the SMMT, and were down 13 per cent year-on-year over the first four months of 2005.
Figures received by Motor Trader claimed that in 2004 the national average return on sales for the Citroen network had shrank to 0.3 per cent. Average dealer profits last year were
said to have fallen to under £30,000 from £56,000 the previous year while the number of dealerships making a loss had risen from 54 in 2002 to 98 two years later.