While the UK’s position on the edge of the eurozone makes it a good place to manufacture and export cars, it has lately been a much less inviting market for motor retailers and importers.
Demand for new cars in Britain was 4 per cent lower than a year ago in November, the ninth such monthly decline this year. The drop reflects souring consumer sentiment, economists say; with no government scrappage subsidies on offer, automakers are struggling to draw buyers into showrooms.
In one symptom of dismal market conditions, Renault on Monday said it was culling five models from its range in the UK and scaling back its dealerships from 190 to about 135.
The French producer, unlike Honda or Toyota, does not make cars in Britain, and so has felt the brunt of an unfavourable euro-to-pound exchange rate.
Renault has, like all its competitors, been forced to discount cars in order to sell them, but even so its sales are down 29 per cent on last year.
With the European car market heading into a downturn, Carlos Tavares, the company’s new chief operating officer, is trying to make Renault’s lossmaking sales operations – like its UK one – pay their way.
Renault said it would from now remove unprofitable sales channels – like rental fleets – and focus on a smaller number of models.
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