New distributor for Peugeot, Citroen

The parent company for Peugeot and Citroen, PSA, has entered into an arrangement with Subaru distributor Inchcape to support the two brands in Australia.

This new arrangement takes effect from today and marks the end of PSA's association with the former distributor, Sime Darby. It's déjà vu all over again for Inchcape, which was the Peugeot distributor prior to Sime Darby acquiring the distribution rights in 2001.

For Citroen, Inchcape is the brand's fourth distributor in less than 20 years. Before Sime Darby the brand was distributed by Ateco Automotive and before that it was distributed by Franzcars. The decision by PSA in 2012 to hand the Citroen franchise over to the incumbent Peugeot distributor, Sime Darby, was not warmly welcomed by Ateco at the time.

According to Inchcape Australia's CEO, Nick Senior, there'll be very few visible signs of the latest changeover. In an email to the local motoring press today, Senior revealed that Inchcape was currently in the throes of recruiting a new General Manager for both the French brands, following the departure of Sime Darby appointee Kai Bruesewitz. Senior revealed that a new appointee will be announced within the next few weeks.

With the exception of three staff from the Sime Darby days, all personnel previously working on the PSA brands for Sime Darby will remain in their roles, but as employees of Inchcape.

The new distributor has long-range plans for the PSA dealer network in Australia, with Senior admitting that he would prefer more dealers selling all three brands – Citroen, Peugeot and DS – through the same retail outlets. At present there are multi-franchise dealers around the country that are selling either one or the other of the brands, but not both Peugeot and Citroen together. Senior sees this gradual merging and reallocation of brands to dealers as a "work in progress".

The Inchcape Australia boss did take the opportunity to praise one Melbourne dealer that has performed well selling PSA product.

"Despite the challenges there have been some standout performers in the dealer network – Bayside European in Melbourne for instance. We are in the process of reviewing our existing dealer network and any substantive changes will be announced in due course."

Inchcape's affiliation with the Subaru franchisee in Parramatta is likely to be leveraged for further retail sales of PSA product, Senior indicated.

"Trivett Automotive Retail is an important part of the Group, and we expect the PSA brands will be included into their existing retail dealership network in due course."

As for the DS brand, that's in a holding pattern for the moment – at least in such a small market for the brand.

"We have no immediate plans for DS but we do not rule anything out and are open to pursuing opportunities which fit the Ignite strategic objective of investing to accelerate growth. We have agreed with PSA to revisit DS in H2 next year," Senior advises.

Inchcape's plans for the growth of PSA sales in Australia are contingent on new product already on the way here, according to Senior.

"The outlook is strong, with the new 3008 (European Car of the Year) launching in Q3 2017 and the 5008 (7 seat version of 3008) to be launched later in the year."

Both those vehicles will underpin Inchcape's sales and marketing strategy moving forward.

"Peugeot will build on its traditional passenger car strengths but the momentum will come from the new wave of SUVs and cross-overs, starting with the 3008 in a few months’ time, and then the new 5008 later in the year."

Senior expects Citroen's product range to appeal more to "a younger target audience", but there are opportunities to bring up that brand's sales further through sales to light commercial-vehicle buyers.

Inchcape is ready to roll out a business plan that has been co-authored with PSA, but any sales projections in Australia for Peugeot, Citroen and DS are being kept close to the chest.

Sime Darby plans to focus on its retail automotive business in Australia, according to a statement two weeks ago by the company's managing director, Patrick McKenna.

"After careful consideration, a decision was reached to divest the Australasian distribution businesses," McKenna was quoted saying in a press release.

"This is in line with Sime Darby Motors’ strategy to focus on the expansion of its retail car and commercial truck footprints on both sides of the Tasman. Once the decision was made, KPMG was engaged to conduct a full tender process for the sales on our behalf.

"Throughout the sale process it has been our priority to ensure that the vast majority of our employees in both countries would be offered employment under their existing terms and conditions. I would like to acknowledge this terrific group of people and wish them well in the future."