PSA modelling itself on VW Group

If you're going to lift a pyramid, it's easier to lift it one corner at a time. But PSA Peugeot Citroen's method of raising itself into the prestige market abides by a more conventional approach.

The French consortium is advancing upmarket by pushing up the tip of the pyramid – represented by the newly-formed prestige brand, DS.

Formed out of the iconography of a Citroen model dating back 60 years, DS is to Citroen what Audi is to Volkswagen, as Citroen global CEO Linda Jackson explained to Australian journalists last week. That leaves Peugeot as the counterpart to Volkswagen, and Citroen equating to Skoda.

Ms Jackson agreed that the Volkswagen paradigm was "exactly" the right analogy when asked by motoring.com.au whether PSA was aiming for a herringbone pattern of market positioning – positioning models so they don't compete directly with stablemates from the other brands. The respective model ranges for the three brands would be complementary rather than competitive.

There will be "no cannibalism" Ms Jackson declared, meaning it's unlikely a buyer would cross-shop a DS5 (pictured) against a C5, in theory at least.

PSA, still recovering from a recent bout of financial hardship, has had some tough decisions to make as to how it would proceed in product development terms, and how it would position its three brands for the future.

"You could differentiate by a low-cost strategy," Ms Jackson admitted, "but that's not our strategy."

Instead, the company is chasing "other premium brands" with the DS product range. These other brands include BMW, Audi and MINI, Ms Jackson said. The strategy seems to be working thus far. DS owners to date "are not the same customers as Citroen customers."

In Australia, where Citroen's nationwide sales for the year to date in 2015 are sitting on just 900 units, mounting a case for DS as a brand entity in its own right is challenging. And Ms Jackson admits that Citroen is underachieving in Australia as it is.

"We can do a lot better in Australia," she conceded. The Citroen exec is a UK native, raised in the manufacturing hub, Coventry. That means she appreciates the unique demands of Anglophone markets where the cars run on the left side of the road.

One of the elements of our market that sets us apart from others is the prevalence of cars with automatic transmissions. This has not been a traditional Citroen strength, but with the French marque selling as many as one in four of its cars to China, where automatics are widely sought, that's a weakness the brand has to overcome.

China is a guide for Citroen in the future. In 2008, "only 20 per cent of [Citroen] sales were outside Europe," Ms Jackson said. Seven years later, Citroen sells 40 per cent of its production outside Europe – "But we need to get to 50 per cent."