There are big changes afoot at Citroën. As of June this year, the manufacturer’s premium DS range, which has been credited with opening the door to user-chooser fleets for Citroën, has become a separate brand.
The thinking behind it is to “maximise the return for the group”, according to Martin Hamill, director of fleet and used vehicles at Citroën. It is part of PSA Peugeot Citroën’s global Back in the Race strategy, which was announced earlier this year and includes plans to reduce the model line-up by almost half by 2020.
“Back in the Race means becoming a global player, having the vehicles in place that are suitable for local market conditions, but also from a profitability point of view,” explains Hamill.
“In terms of fleet, we’re not looking to go out and grow our business for the sake of it through fast churn.
“Are we looking to conquest new sales? Yes, but with the right type of business. This year we’ve been successful with bringing new national fleet customers to the brand so it’s really important we continue to do that.
“We’re at the very beginning of the road map for the launch of DS as a separate brand and we will have to communicate over the coming months and years what that means for the fleet customer in the UK.”
For the time being at least, DS will continue to be delivered through traditional Citroën dealers.
“The short-term plan is that we don’t have a separate field force because DS accounts for about 30% of Citroën’s fleet car sales and I’m a great believer in the old adage that cars sell vans and vans sell cars,” says Hamill.
“You can extend that to say DS sells Citroën and Citroën perhaps sells DS within a fleet arena.
“You’ve just got to look at one or two competitors and how long it took them to reach where they are in terms of their brand dynamic from where they started, so we need to plan steadily rather than trying to run before we can walk.”
Fleet News: Why are you achieving more sales with larger fleets and leasing companies this year?
Martin Hamill: I couldn’t say it’s necessarily one individual thing. It’s been steady progress over a number of years. What we’ve continually tried to do is to challenge people’s perceptions of Citroën and what it means and what we can deliver and that can’t stop. Winning conquest fleets from the big players is the acid test of the message getting through. But it can’t just be a message, it’s got to be backed up by actions and that’s where our business centres help us. We’ve educated our network to the demands of the leasing industry so they’re better informed about what they should do.
We need to be seen to be reactive to leasing company requests. In August our average 1link response time was 11 minutes, which is our best ever individual month. Year-to-date the average is 14 minutes, but if you go back two years the average was significantly higher than that.
FN: Citroën’s fleet market share for cars has dipped slightly to 3.79%. Are you still targeting 4.5% over the next three years?
MH: 2013 was our best year in terms of our market share where we just nudged above 4%, so 4.5% is still the aspiration. However, I would caveat that by saying we need to be extremely conscious of the channels we sell our vehicles into and the degree of profit that we try and take from them. We’re not letting rental exceed 5% of
our total car sales – that’s a self-imposed cap. It’s about 50% of what the industry norm is for rental. Also, we
were supply constrained in the first half of this year with C1 on run-out. That was one of the major reasons our market share dipped, combined with a fresh start with Grand C4 Picasso.
FN: What do you think appeals to fleet operators about the Grand C4 Picasso?
MH: Its CO2 emissions start from sub-100g/km, which is a really important message for today’s business drivers. It also looks and drives like a business car should. The designers have done a fantastic job with the way it looks and that goes for both the five-seat C4 Picasso and the seven-seat Grand C4 Picasso. Because of that, certainly on the five-seat model, we’ve got a wider appeal than perhaps we had on the previous generation cars. One of the things that we’ve been pleasantly surprised with is the volume uplift we’ve achieved on the five-seat car. That has given us a better balance between five- and seven-seater compared to where we were historically.
FN: How have fleet operators reacted to the new C1?
MH: It’s been well received into both public sector and salary sacrifice markets; it’s the sort of car that is going to appeal to that profile of driver. Again, it offers low CO2 and running costs, but, more than that, its got a real funky design compared to the previous-generation car. We’re going to sell more of the new car in the second semester of the year compared to what we achieved on the run-out of the old car.
FN: What are your fleet sales expectations for the Cactus?
MH: This year it’s quite low; we’ve written in about 1,000 cars, but next year it’s around 5,000. The big story for fleets is that the CO2 starts at 82g/km with more than 90mpg. When people first saw the car they thought ‘that’s interesting, but it is going to be more of a retail proposition?’. When you analyse the total cost of ownership figures, you come out with a very attractive proposition. That’s why it will have appeal across lots of different sales channels. We will have a small number going into daily rental to support the launch effort of the car, but it will be a very small number in the grand scheme of rental volume.
FN: How will fleet managers react to the Airbump protective door panels?
MH: They’ll be thinking about reducing in-life charges and damage charges. Every £200 or £300 they can avoid spending in-life all goes to the bottom line. You add that to the saving on fuel, the saving on benefit-in-kind etc., and it’s a powerful proposition we’re going to market with.
FN: You’ve got the new Relay this year, how are van sales in 2014?
MH: The van story is really positive. We’re outperforming the market yet again, so we are building on the success we had in 2012 and 2013. It’s not just one vehicle that’s driving the performance, all of our model families have increased their penetrations within their individual sectors. Having a balanced portfolio of sales is really important for us.