Spanish Dealers Condemn Chevrolet’s Exit Strategy

MADRID – Chevrolet and its Spanish dealer network are at odds over compensation for dealers, following General Motors’ decision to evict the brand from the European market to avoid competition with German affiliate Adam Opel.

Chevrolet in December informed its Spanish retailers of its intention to cancel their respective contracts, as the brand will be leaving Europe by the end of 2015. The announcement met a European Commission requirement of two years’ notice.

The dealers prepared to face a long period of difficult negotiations with the American brand.

But Chevrolet apparently wants to speed up the talks and wants to conclude them before the end of the year, by summer if possible.

Last month, Chevrolet Spain presented to its 85 dealers compensation of about €600 ($820) per car sold in one year, on the sales average of 2010, 2011 and 2012. The poor sales year of  2013 was excluded.

But the deadline for accepting the compensation is March 31. The offer will be reduced to €400 ($550) during the second quarter of the year, and to €200 ($225) during the third quarter. Beyond then, nothing will be offered.

According to ANIACAM, the Spanish Association of Auto Importers, dealers sold 22,961 Chevrolets in 2010, 17,523 in 2011 and 15,173 in 2012, for an average of 18,552.

Sources familiar with the dealers say the best Chevrolet offer of €600 per unit will bring each retailer between €30,000 ($41,000) and €180,000 ($246,000), for a total of €11.1 million ($15.2 million).

“As it will be necessary to lay off about 1,000-1,500 people, those compensations only mean about €7,000 ($9,600) for each laid-off worker, a very small compensation in the Spanish labor frame,” a source tells WardsAuto.

Some retailers invested €500,000 to  €1 million ($685,000 to $1.37 million) in their businesses during the past year, as Chevrolet continued adding new dealers to its Spanish distribution network until seven or eight months ago.

Those investments are unlikely to be recovered through the Chevrolet compensation program, as the Spanish auto market is very competitive and dealer networks overall have been steadily reduced during the economic crisis years.

A possible solution for Spanish dealers would see a Chinese automaker using the Chevrolet distribution network to introduce its cars in Europe. “Interesting solution, but only a rumor,” a source says.

Chevrolet models currently sold in Spain includes the Aveo, Spark (4- and 5-door), Cruze (4- and 5-door, and station wagon), Malibu, Trax, Orlando, Captiva, Volt and Camaro.