Aussie revamp for Peugeot and Citroen

Peugeot will be positioned as a premium brand and Citroen will be the focus for light commercial vehicles as part of the relaunch strategy of the French brands in Australia by new distributor Inchcape.

But making the plan work and building success and sales for the PSA Group brands will be “a challenge”, Inchcape Australia CEO Nick Senior emphasised repeatedly to media at yesterday’s launch of the Peugeot 3008 medium SUV.

“We have not underestimated the job ahead because it is going to be a challenge,” he said.

“There are going to be no silver bullets. It’s going to be a mixture of hard work, investment, innovation, commitment, attitude and above all accountability by everyone; us, PSA and the dealer network.

“But if we get those ingredients right then I think along the journey we are going to have some successes and also have some fun.”

Inchcape, which is best known as the highly successful distributor of Subaru vehicle in Australia, took over local distribution of the PSA Group brands from Sime Darby on June 1.

Sales of both brands – including Citroen’s luxury DS sub-brand – have plunged in Australia this year during the change-over of distributor. Peugeot sales are down 47.9 per cent and Citroen sales 47.8 per cent.

A revitalisation of the Peugeot and Citroen’s Australian sales fortunes will be a small but important contributor to the PSA Group’s plans to even up demand to 50:50 inside and outside Europe by 2020. Currently, international markets account for around 38 per cent of sales.

Peugeot and Citroen managed just over 4000 sales in Australia in 2016, compared to their best combined effort of more than 12,600 in 2007.

Inchcape has agreed sales targets for the two brands in Australia with PSA Group for the next five years, but Senior wouldn’t reveal what they are.

He also refused to discuss the prospects of the deal potentially expanding to include local distribution of Opel, the German brand which PSA completed its purchase of from General Motors only days ago.

“Hasn’t been part of any discussions,” Senior said. “That sort of thing is spoken about at a much higher level than I operate in.”

The 3008 is the first vehicle launched under Inchcape’s management. It has made a statement by announcing a $39,990 drive-away entry-level price in a class where rivals such as the Mazda CX-5 start from under $30,000.

“We will not be the cheapest in the market and nor should we,” said Senior of Inchcape’s price and positioning policy for Peugeot and Citroen models.

“We have already taken a deliberate strategy to exclude all base models from the line-up. As Australia has moved more and more in the last three years to premiumisation, the level of interest in the base model and sales have dropped accordingly.

“Under 10 per cent of all sales are base models compared to 23 per cent a few years ago.”

Alongside that, however, there have been recent price cuts for the 208 and 2008. Senior hinted strongly that more repositioning was on the way.

“Our go-to-market strategy in the future is to market brands that represent true value for money in the premium segment.”

Senior confirmed the 3008 will be followed by the launch of the facelifted 308 hatch in October and the all-new 5008 seven-seat SUV in December.

A new-generation 508 sedan and wagon is expected around mid-2018.

“The product pipeline is exceptionally strong, indeed very strong. Peugeot will average two new product launches per year for the next couple of years,” he said.

On the Citroen side the new C3 launches in October, and also on its way is a new Berlingo small commercial van – an all-electric people-mover version of which is about to be released in Europe, dubbed E-Berlingo (pictured).

The Citroen focus on LCVs, in addition to its line-up of youth-oriented vehicles such as the C4 Cactus, is in part driven by a desire to even up sales between the two brands. Peugeot currently outsells Citroen about four-to-one.

“There will be a huge ramp-up of our focus on light commercial vehicles because this is a hugely untapped market,” Senior said.

“Rather than confusing buyers, all light commercial vehicles will be marketed under the Citroen nameplate.

“To support the increased focus on LCVs you will also see us focus much more aggressively on the fleet, government, corporate, rental space.”

Senior nominated five reasons why Inchcape has taken on the distribution of Peugeot and Citroen in Australia:

>> The dramatic turnaround in financial fortunes of PSA in the last three years under the leadership of Portuguese engineer Carlos Tavares
>> A rapidly evolving product portfolio with a strong emphasis on SUVs
>> The shift of Australia buyers toward premium vehicles
>> The tradition and reputation – albeit currently unexploited – of Citroen and Peugeot in Australia
>> Inchcape’s success in vehicle distribution, retail and logistics