AUTOMOBILE

Stellantis undergoes ‘unprecedented’ shake-up of its European dealership network

Dealers eye bottom line

Pietro Carlomagno, president of ADEFCA, the European association of Fiat, Alfa, Lancia and Jeep dealers, said his group is “in a constructive discussion” with Stellantis on how shift will be implemented.

What is crucial to ADEFCA is that the dealers do not lose any pre-tax profit as a result of the change.

“The main open issue is making sure that the reduction in the dealer’s commission matches the savings they get from the reduction in costs they pay now as part of the current dealer model,” Carlomagno said.

He said the new system would only be beneficial to retailers if Stellantis maintains transparent retail prices that are the same at all dealerships and on the Internet.

Stellantis, which was created in January by the merger of PSA Group and Fiat Chrysler Automobiles, does not have a single dealer association. Former FCA brands are under ADEFCA’s umbrella, while Peugeot, Citroen and Opel/Vauxhall have their own associations.

ICDP’s Young sees some advantages from Stellantis’ model.

“The fact that Stellantis appears to be committed to taking over the inventory responsibility and cost, and the brand-related facilities investment, is a positive,” he said.

Young is a big believer that automakers and dealers should do a better job managing their inventories to prevent oversaturating the market, which leads to discounts and lower residual values. The poor supply of semiconductors has underlined the benefits of this approach.

“The chip shortage shows us how an end to excess supply can transform profitability for everyone,” Young said. “But it is a huge change for a major automaker.”

According to ICDP, when Stellantis was formed it had approximately 15,500 dealer franchise points in Europe, equally split between FCA and PSA brands. The consultancy estimates that those franchise points are controlled by roughly 5,000 dealer organizations.

Stellantis declined to provide detailed data about its dealer network in Europe.


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