PSA seeks to position Peugeot and Citroen brands further apart

Article by Anita Panait, on March 13, 2013

PSA/Peugeot-Citroen is planning to position its two major brands – Peugeot and Citroen -- further apart. Peugeot and Citroen have been pursuing a very similar customer base, a situation that has aggravated French carmakers for some time now. PSA chief executive Philippe Varin admitted in February 2013 during the presentation of its financial results for 2012 that Peugeot and Citroen are “too close."

According to Varin, PSA is planning to have Peugeot and Citroen target two different customer groups while at the same time target what he dubbed as "profit pools." Varin disclosed that the Peugeot brand will shift up-market and will target vehicle customers who want a traditional type of car. Peugeot already boasts of a lineup that could help it achieve higher profit margins per sale.

The lineup includes the Peugeot 208's high-performance GTi version and the new 2008 SUV-styled crossover. Citroen, on the other hand, will expand its upscale DS line to achieve larger profits. Its mainstream models like the Citroen C1 to C5 -- the so-called C-line models -- will be positioned slightly lower than the current models, Varin said.

The positioning move means that PSA has abandoned its three-level strategy for Citroen to have DS, C and Entry models by combining the latter two. Varin, however, assured that Citroen will not become a low-cost brand. PSA brands chief Frederic Saint-Geours remarked that the new positioning for Citroen's C-line models was determined in 2009. Asked whether new Citroen models would be as profitable as the current ones,

Saint-Geours replied that there is no reason that they should be less profitable. He declined to comment whether Citroen models would be targeted against Ford or Opel models that are at the higher end of the volume segments, with Skoda and Hyundai on the lower end.

Saint-Geours quipped that since their brand positioning is a new concept, they cannot refer to existing cars. Vehicles like C-Elysee sedan underscore what analysts have dubbed as Citroen's new "cheap premium" brand positioning. Another one is the new C4 Picasso minivan, which is previewed by the Technospace concept unveiled at the Geneva auto show.

Topics: psa, peugeot, citroen

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