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NEWS
Major shake-up for Peugeot and Citroen
Australian distributor is revisiting future product, revamping the dealer network, and streamlining managementPeugeot and Citroen are embarked on a new campaign to lift sales and improve the respective brand images after a less than stellar performance in recent years.
At its height Peugeot sold over 8000 units in Australia, during 2007. Last year it sold barely 5000 units. For Citroen the situation is even more parlous; selling just 1702 cars last year and unlikely to achieve even that sort of figure this year. For 2007 Citroen sold 3803 cars in Australia...
Citroen's sales in the local market have stalled in the aftermath of PSA's decision to transfer the distribution of the brand in Australia from Ateco Automotive to Sime Darby. The handover, which took effect earlier this year, resulted in the former distributor cancelling forward orders and launches of new models, while the new distributor has had to accommodate a second dealer network and find additional resource to manage the brand – that additional resource starting with the General Manager, John Startari.
Startari is new to the Citroen brand, but even newer to Peugeot, which he also heads. An in-house decision to join both brands at the top led to the departure of former Peugeot GM/Director, Bill Gillespie, and Startari assuming the responsibility for managing Peugeot as well as Citroen.
On hand for the launch of the new Peugeot 2008 earlier this week, Startari presented the brave new world of PSA (and Sime Darby) to Australian motoring journalists. He firstly explained the reasoning behind his elevation into a role that oversees the two brands, before announcing an expanded dealer network next year and then providing an analysis of how Peugeot's sales volumes by model have changed over the years.
Subsequently he was interviewed by motoring.com.au and revealed that new models believed to be locked and loaded for a local launch in the near future were actually far removed from that scenario. The promise of two hybrid models hangs in the balance, the 408 sedan remains under consideration but nothing more, and the 108 – a sub-208 light hatch – is definitely no longer planned for local release.
Two things quickly became clear. Firstly, the new boss is less expansive than his predecessor in the role. Secondly, the sales footprint for Peugeot (and Citroen) in Australia is in a state of flux. As Startari pointed out, Peugeot's top-selling car in 2007 and 2008 was shared by 307 and 308, but the top selling car in 2013 is an SUV – the 4008 that is based on the Mitsubishi ASX.
The very fact that Peugeot's expanded dealer network (from 38 to 40 next year) is predicated on an important new core model – the new 308 in the second half of next year – strongly indicates that under Startari's new regime, the French brands are focusing their efforts on core products and filling gaps in their national retail coverage.
This is supported by Startari's remarks concerning the prospects of 108, 408 and the two hybrids being sold in Australia. If an upcoming new product is not 'core', it seems likely to be ruled out, unless it's something like the 200kW RCZ R – a brand-building hero car that can be brought in at a competitive landed cost and earn plenty of kudos from the local press.
For the product planning goal posts to shift so radically in a matter of months hints at the different management styles and techniques of Gillespie and Startari, but it also appears to be late arriving recognition that the two French brands are struggling in Australia and there needs to be a far-reaching strategy to recover sales and profitability, while also cutting costs.
This was explained by Startari earlier in the evening, when he outlined the merging of his role with Gillespie's.
"Sime Darby assumed the Australian distribution of Citroen in February this year. An internal review determined the two general managers roles should be merged into one. Sales, marketing, product and dealer development roles will remain dedicated to each brand.
"This structure has been implemented, to better achieve the available synergies from distributing both brands within the one importer.
"The merged general manager roles will be incorporated into a newly-created position, General Manager/Director, Sime Darby Wholesale Australia."
As well as creating a more efficient hierarchical management structure, there are cost savings to be had – and a clear implication is that Startari is guiding Peugeot and Citroen in a direction Sime Darby and PSA want to take.
In a total market that is 27,270 sales larger (3.3 per cent) than for the same period of 2012 – a record-breaking year itself – both Peugeot and Citroen have seen sales slide. Peugeot has lost 226 sales for the year to date, down from 3919 to 3693. The situation is even more dire for Citroen, with an even larger sales decline from a smaller sales base – 423 fewer cars sold, down from 1319 to 896 sales.
But things are looking up, at Peugeot. The 4008 is selling strongly and a new 308 should reverse the small car's sales slump in recent times. On top of that, the 208 light hatch is selling in respectable numbers and its performance variant, the 208 GTI, has sold out of stock... it has been that popular.
If finding the right product to sell is one aspect of improving the prognosis, making sure the importer has enough retail outlets in the right locations also counts. Peugeot aims to increase its dealer network from 38 currently to 40 next year. It's a small step for a larger brand, but not Peugeot.
A concern is that of the 38 dealers selling Peugeot, 15 of them also sell Citroen, according to Startari, and the importer's longer-term plan is for the two brands to be sold separately and as distinct entities. Startari agrees that would be unsustainable for Citroen in the current market, with sales as relatively low as they are, but the impact of changing distribution from Ateco to Sime Darby cannot be underestimated. Citroen should bounce back as the product range expands under new management, making increased sales low-hanging fruit for the brand.
"Obviously we're only at the start of a relaunch campaign, so yes, throughput is front and centre..." he admitted. And hiving off Citroen from Peugeot may mean a considerable shake-up for the combined dealer network, but not necessarily to the disadvantage of multi-franchise dealers.
"We're going to select the dealers, on the best case, in each area... each PMA, for the product range in the future," said Startari. "If that so happens to be the same group that's fine. We're not going to penalise them for having one or the other..."
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Written byKen Gratton
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