Fleet News

Citroen pulls out of 'unprofitable' deals

CITROEN executives have announced plans to slash the manufacturer's fleet business by 9,000 units this year.

The group plans to pull 6,000 units out of the daily rental market and 3,000 units from Motability, the UK's largest fleet. However, the group says it will continue dealing with fleets that generate profits.

A Citroen spokesman said: 'We haven't pulled out of fleet. What we have done is pulled out of unprofitable fleet business which can't be justified in terms of margins.

'We have pulled back in certain areas such as daily rental.

'In 2004, daily rental business will be under 1,000 units in total. We are not getting involved in daily rental, pulling right back because of the euro. We can sell those cars elsewhere for more profitability.

'We have also pulled out of Motability and large fleet business which has cost us about units against 2003.'

Peugeot and Citroen announced last month that they were reviewing their UK fleet business as parent company PSA revealed that 'unfavourable' exchange rates had had a negative impact on sales and profits.

The rise of the euro knocked €567 million from PSA Peugeot Citroen's car division profits, which reduced operating profit from €2.2 billion in 2002 to €1.3 billion last year

The Citroen spokesman said: 'Our fleet strategy is dictated by the euro because our vehicles are made in the euro zone. Sales compared with last year are not as strong because the pound has not recovered. We are pulling back because of the euro.'

However, despite a reduction in fleet business, Citroen has not reduced its fleet support team.

'We had 25 people in the fleet department last year and we still have 25 providing fleet support,' the spokesman said.

Citroen currently has a 66%/ 33% split between retail and fleet business, compared with a split of 60%/40% last year.

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