Fleet News

Face to face: Steve Harris, Peugeot fleet director

THERE is no doubt that first views of the Peugeot 407 resulted in a collective gasp from the fleet industry. Whether that gasp was the result of terror or awe remains to be seen.

It is a bold step, particularly in the way it looks at the front end, and great intentions on the drawing board don't always translate into great sales.

So Peugeot's fleet department has been laying the foundations for the arrival of this key car for some time now, ensuring that when it arrives this month, the fleet industry is prepared for it.

Steve Harris, Peugeot's fleet director, said the process started back in the dark winter days of 2003. He said: 'We've been talking to the industry since before Christmas last year. We had an advance preview of the vehicle with a number of opinion leaders including CAP, Glass's, Emmox and the major leasing companies at a Paris preview.

This was well ahead of launch in December.

'Then in January we had the dealer and fleet launch for 200 major fleets to see and drive the car. Response from that was excellent.'

The strategy was obviously the right one. Even though the car is yet to hit showrooms or see service in fleets, Peugeot has taken more than 3,000 orders for the car.

Harris continued: 'We opened the order book at dealers in the first week of March and we set prices, opened our dialogue ordering system and the orders have built since then. So we've been selling the car, in effect, for close on two months.

'The customers so far have been all sorts: retail buyers, major fleets and leasing company sales.'

The 407 will be a major player in the fleet sector, and about 70% of the projected 26-27,000 sales will go that way. And within that 70%, much will go through the leasing companies.

Harris said: 'If you look at the UK fleet market, and especially if you look at the upper-medium sector, it is predominantly contract hire and leasing and we've recognised that and have spent a lot of time with them.

'It's a consistent to growing market and we think it will remain the leading fleet channel for people to get into these cars.'

As a result part of the build-up to the on-sale date has seen Peugeot taking the cars to the leasing industry.

Harris said: 'Something which we are doing, in conjunction with a number of the major leasing companies, is having something we call a leasing company roadshow, and we will be taking the cars to the leasing companies so that the widest number of people in their organisations can get behind the car.

'We want them to understand it and be enthusiastic about it and we think they will be. Most leasing companies that we talk to are very keen to do that, and are quiet open to that idea.

'It's something we did on a smaller scale with the 307 CC and it worked well, but obviously 407 is on a much bigger scale. We're spreading the net wider.'

So management of product information at launch is going well, but there is also plenty to be done managing expectations, and in particular residual values. With RVs in the upper-medium sector still weak, Harris and his team have been talking to the industry about secondhand value predictions.

He said: 'We've had a survey conducted with the top 15 –20 leasing companies and its panning out much as we expected in that and getting towards the top end of the sector.

'Overall, we're in line with where we thought we wanted to be, in that we've gone a quantum leap ahead of 406, and we're also ahead of our established competitors.'

But Harris is pragmatic enough to know that the 407 is not taking Peugeot into premium territory. The 407 is fleet and volume through and through.

He continued: 'We are a generaliste manufacturer, to use the French word – a volume player and we're not moving to compete head to head with the premium brands, although we shouldn't think that we're excluded from that club.

'We're attacking volume brands and if you look at the pricing of the car, that's aggressive pricing: the thought being that if you do that, you can achieve your sales volumes and you don't have to take actions after launch that will actually reduce confidence in the product. So we're launching it from day one on the basis that that will be sustainable.

'We're not being precious either – we're being realistic, and we're not giving big discounts and we shouldn't have to. There's aggressive retail pricing, which we've got; there are good RVs, which we've got and an effective product, which we've got.'

In the UK fleet sector, Peugeot reckons that a massive 80% of 407s could be diesel powered, and Harris reckons that is due to the historic strength of Peugeot diesels and two new engines: the 1.6-litre and 2.7-litre units.

He said: 'Peugeot is the diesel brand and the new HDi, Euro IV compliant engines will reinforce that position. We have the V6 197bhp diesel sometime next year and that will further reinforce the diesel line-up.'

The new small diesel engine might take some getting used to for drivers, looking as it does on paper such a small engine for such a large car. But Harris reckons it is just a matter of education.

He said: 'The whole diesel engine development requires people to reassess the way they look at diesels. If you look not many years ago, if you had talked to people about a 1.6-litre diesel engine that produces 109bhp they'd have looked at you sideways. It ticks all the boxes on what a fleet is looking for. In fact we should be saying that its great you can deliver all these things from a 1.6 engine. Environmentally, it all stacks up.

'Initially people will say does it deliver? But the proof of the pudding – mixing metaphors – is in the driving! You've got to get people behind the wheel, and it will take, in some cases, some education.'

The appeal of the car lies in the fact that it offers something a little more quirky in a sector known for conformity and conservatism. And user- choosers will be a major target, rather than essential users.

Harris said: 'The 407 is aimed fair and square at user- choosers and it will appeal. I think we've taken an approach with the style of the car which is distinctive, it does make a statement and it is attractive and it might not appeal to everybody but those people that it will appeal to will be really taken with it.

'You line it up with some of its competitors and it stands out. The SW estate continues that. It's a lifestyle vehicle and from a user-chooser point of view we think, in fact we know because we have had the car in clinics, it will do well among the buying public, which includes the user-chooser.

'The dealers are geared up for it. Increasingly people use the internet, and we recently relaunched our fleet site so in term of the sources people got to for information, we're pretty much there.

'We're very excited and enthusiastic about the car. Not just a change for Peugeot but a change for the sector. I think it will inject a bit of life into the whole sector.'

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