Rod Philpot, director network development, said the brand's 301-strong sales network could be reduced by 10 per cent within two years. Philpot claimed improved road access to the UK's conurbations meant fewer dealerships were needed but he added: “We have a clear obligation to meet consumers' needs.”

He said dealers were on fixed term contracts until 2010, when the European Union is set to introduce a renewed block exemption, and that Peugeot was required to give a year's notice of termination to dealers. He claimed new product such as the best selling 207 would push the brand's market share up to 6.4 per cent – from 6.15 per cent last year - and lead to growth of 4 per cent compared to 2006's total of 144,000 sales. He said the 207 was particularly good news for rural dealers with little or no fleet business as it appealed predominantly to private buyers.

He claimed the supermini had boosted Peugeot's retail sales by 12 per cent in 2007 compared to overall retail growth of just 1 per cent. Both retail and fleet volumes will be helped by the launch of what is expected to be the brand's second biggest seller, the 308, which arrives in showrooms with the 4007 SUV in September. Philpot admitted there was a long way to go before all dealerships complied with Peugeot's Blue Box corporate identity. “We don't have 100 per cent of the network in the image we would desire – 110 are at that level.”

But he argued that whereas exterior developments required heavy investment and were subject to planning permission most dealerships had got right the most important aspect – the “interior ambiance”. Philpot said the Peugeot network's poor performance in the JD Power Customer Satisfaction Survey was “very concerning” but that the situation was improving with the establishment of a customer satisfaction index and a revamped model range. “It takes a while to get back up the ladder but now we have the right product.