PSA-owned Vauxhall plans to reduce its UK dealership numbers by around a third reflecting reduced sales through traditional dealers for the brand.

The brand plans to reduce the total from 326 to about 200 and is planning to cancel contracts with all existing dealers and issue new contracts to a smaller number. The move is part of a PSA drive to return the loss-making Vauxhall and Opel businesses to profitability.

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Stephen Norman, managing director of Vauxhall, said it and sister brand Opel “would not require as many retail outlets as the brands currently have”.

He also told journalists that more consumers are expected to buy cars online in the future.

Around 12,100 people are employed in Vauxhall’s UK retail network, but the dealers who leave it can ‘re-franchise’ to find alternative brands.

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Elsewhere in europe, Opel is expected to go through a similar process of retail network rationalisation. Some 1600 dealers across the pan-European network (400 in Germany alone) will be given two years’ notice from April 30 that the manufacturer is ending its relationship with them, and proposing a new contract with about two thirds of them.

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The Vauxhall dealers that survive the network reduction could also become more closely integrated with other PSA brands. Another possibility is that Vauxhall will move more resources to pop-up shops in locations such as shopping centres, in addition to moving more sales online.

Vauxhall has been losing share in the UK market, where its long-held position as the second biggest brand after Ford has been lost to Volkswagen. The Ellesmere Port manufacturing plant has also dropped a shift due to slow sales of the Astra model in the UK and across Europe. A decision on the future of the Ellesmere Port facility which only makes the Astra model (current generation scheduled to cease production by 2023 at the latest) is expected to be taken in 2020.