Fleet News

Rental cuts show residual value promise for Peugeot

Peugeot’s plan to reduce exposure to short-cycle growth is beginning to pay dividends, according to its outgoing fleet and used vehicles director.

Phil Robson, who is leaving his post to take up a new role with the company based in Paris, says that although cuts in its daily rental volume haven’t been quite as low as planned (18% compared to the 23% originally planned), it is already having an impact on residual values.

As he outlined progress in 2013 and the company’s plans in the fleet market in 2014, he said the results were already visible in residual values forecasts for the new 308.

He said: “In 2014, we’ll have the newest car range we’ve ever had. It would be easy to supply the daily rental sector, but we’re investing long term in improving residual values.

“We’ve already seen an improvement with the new 308. The previous 308 had a £3,000 residual value differential with the Volkswagen Golf at three years/60,000 miles. We’ve reduced this to £900.”

He said customers will notice improvements in all areas of the new 308, but alongside cars such as the Golf, a purchase price advantage would make the 308 even more desirable.

Robson said the forthcoming 82g/km 308 BlueHDi model will have a price advantage over the Golf Bluemotion of more than £2,000 as well as a more powerful engine, which would comfortably offset the deficit in residual value.

He is happy with Peugeot’s performance this year and a small decline in its share of the fleet car market (5.5% year to date compared with 5.8% for the same period in 2012) could be accommodated in its reduction in rental volume, which is down by almost a fifth compared with last year.

Robson, rather than refer to the fleet channels by name, grouped them by colour, indicating ‘green’ as positive sectors in which to increase volume, and the opposite with ‘red’.

“Rental is down 18%, captive fleet is down. Motability is up slightly, contract hire is up and true fleet is up,” he said.
“We’re growing in the ‘green’ channels and declining in the ‘red’ channels. Performance has been strong with the 208 in its first full year.

“Vans are down slightly, but we did a single deal for 3,000 vehicles in 2012. Without that sale in 2012, we would be up 12% in 2013. The Bipper continues to benefit from an appetite for downsizing and small businesses coming back into the van market. The Boxer is up 34% – we do very well from conversions and work hard to ensure we have quality partners. We expect Boxer sales to increase in 2014.

“In a fleet market that is up only slightly this year, it’s good to be up in true fleet by 17%.

“We have made significant reductions in our short cycle volume, with 8,500 cars this year. Although we planned 7,500 vehicles, 8,500 is still much lower than last year.

“Our plan next year is for 4,500 vehicles, although it might end up as 5,000.”

These figures relate only to contracted buy-back rental; they exclude short-term tactical activity and non-contracted deals which add just over 4,000 additional units to the daily rental total published by the SMMT to the end of September.

Robson will hand over his role to Martin Gurney, on January 6, 2014, and Peugeot has also created a new role dedicated to dealing with small businesses.

Nick Crossley has been appointed head of business sales for Peugeot, reporting to Neil Moscrop, director, sales operations. He will be responsible for developing strategic sales channels for Peugeot with the aim of improving sales of both cars and vans to businesses via the dealer network.

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