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Stellantis terminates dealer contracts
Even if something like this had been expected in the industry, the timing and the manner in which it happened were unexpected: The Stellantis Group is rearranging its sales and has terminated its dealers at the end of the month.
Stellantis terminates dealer contracts
The Stellantis Group has announced a far-reaching restructuring of its brand networks and informed the sales and service partners of the brands belonging to the new group that their dealer contracts will be terminated on May 31, 2021 with two years' notice. The contracts therefore expire on May 31, 2023.
The group wants to build a multi-brand sales model, which it will launch from June 2023. So far, however, the manufacturer has hardly approached any dealers and there is no Letter of Intent (LoI) yet. With the declaration announced yesterday, many traders were caught off guard, even if experts had predicted such steps, according to those in the industry. Many now fear that Stellantis will use the opportunity to significantly thin out the dealer network.
Bad timing, little appreciation?
Even in the very important market of Germany, just 15 minutes were allotted for the responsible corporate manager to make the statement. No questions were allowed - for some, not exactly a sign of appreciation. The timing, the time pressure imposed and the form of communication chosen are described as unfortunate by dealer representatives, at least behind closed doors.
It won't be clear until July who will receive a Letter of Intent (LoI) and can expect to continue to be a trading partner of Stellantis. The LoI for future partners usually comes with termination. In this specific case, this means that from now on all authorized dealers of the brands will have to hang in the air for a few weeks and fear that they will be without a contract in two years.
But even those who get an LoI in July are still in the dark. Insofar as it is still far from clear what will be in the new contract. Because the block exemption regulations (GMOs) are about to expire. The so-called vertical GVO, which applies to new car sales, expires on May 31, 2022. The motor vehicle GVO, which is relevant for the after sales area as well as service contracts, a year later, i.e. 2023. The decision on the new regulation is still pending.
The Büchl case sends regards
The European manufacturers' association CECRA speaks in a press release of a “radical decision”. This comes just a few weeks after the Austrian Supreme Court largely confirmed the first instance ruling against PSA in the legal dispute with the Upper Austrian Peugeot dealer Büchl. This leaves us with the assessment that Peugeot has abused its market power over dealers for years. This has alarmed the industry across Europe, especially since far-reaching effects and possible follow-up lawsuits are to be expected or at least conceivable. In connection with the Büchl case, Cecra General Director Bernard Lycke spoke of a “breakthrough in a decades-long fight for more fairness in the relationship between manufacturers and dealers” (you can find out more here ). Against this background, dealer associations are now hoping for constructive, objective negotiations with PSA parent Stellantis.