Brakes put on Citroën for now
Challenging market forces group to focus on one brand
PEUGEOT Citroën South Africa, the whollyowned subsidiary of the French vehicle manufacturer, has decided to discontinue the importation of new Citroën models into the country as part of a new fiveyear plan for the country.
But Francis Harnie, the managing director of Peugeot Citroën SA, stressed the car was “not leaving or pulling out” of South Africa and they would look at resuming imports of the brand within two or three years.
Harnie said there was a need for Peugeot Citroën SA to be more competitive in the South African market and to achieve that it would be putting its entire financial means and focus into one brand, Peugeot.
“It’s about sustainable profitability for us and our dealers and for that you have to make tough choices but they make sense. We’re not strong brands in South Africa at the moment and we need to get momentum. If we’re split into two brands, it won’t work,” he said.
Harnie said the foundation of the plan was laid at the beginning of 2014 and it was not something that had been decided upon in a couple of days or weeks ago.
He said the group had decided to focus on the Peugeot brand rather than the Citroën brand for several reasons.
Harnie said the main reason was the evolution in the short term of the Peugeot model range compared to Citroën, with four new Peugeot products to be launched next year and at least one model a year from 2018.
Citroën would not be launching any new products in the next two to three years and was less suited to the South African market, he said.
Harnie said South Africa was a key market in the development strategy for the Peugeot brand in the Middle East/Africa region. He said Peugeot Citroën SA had established a car parc in South Africa of 60 000 vehicles in the past 10 years, of which 45 000 were Peugeot models and 15 000 Citroën units.
Year-to-date this year, the company has achieved 1 100 Peugeot and 480 Citroën sales in the domestic market.
Harnie said prospective car customers all knew about Peugeot but not necessarily about Citroën.
“There is also much more history in the country around Peugeot than Citroën. But once we get the Peugeot brand established, nothing stops us bringing back Citroën,” he said.
Harnie said the five-year plan involved rationalising and harnessing all their marketing capacity under one brand to compete in the South African market, touch the customers it wanted and increase its marketing impact.
He added it was not easy for vehicle importers to be competitive in the South African market and achieve sales be- cause of the weakness and volatility in the value of the rand, the economic environment and the benefits and advantages local vehicles manufacturers obtained from the Automotive Production and Development Programme.
Harnie said they had not yet stopped importing Citroën models into South Africa but its 26-strong dealership network had less than 100 Citroën models available for sale.
He did not believe their customers would have any issue with buying the remaining Citroën models because the warranty and service plans remained intact and the vehicles would still be serviced and maintained by the same dealer network.
Almost all the dealerships are multi-franchise dealerships that sell and service both Citroën and Peugeot models.
Harnie was also convinced the resale value of Citroën models owned by their customers would be unaffected by the decision to stop importing the brand.
He added that this would be something they would monitor but if Citroën owners bought a new Peugeot, they would “get a nice resale price”. THE EU has launched an investigation into whether Chinese producers of certain corrosion- resistant steels are selling into Europe at unfairly low prices, in its latest action against cheap Chinese steel imports.
The European Commission has determined that a complaint brought by EU steel makers association Eurofer merits an investigation, the EU’s official journal said yesterday.
The EU has imposed duties on a wide range of steel grades after investigations over the past few years to counter what EU steel producers say is a flood of steel sold at a loss due to Chinese overcapacity.
About 5 000 jobs have been axed in the British steel industry in the past year as it struggles to compete with cheap Chinese imports and high energy costs.
G20 governments recognised in September that steel overcapacity was a serious problem.
China, the source of 50 percent of the world’s steel and the largest steel consumer, has said the problem is a global one.
In October, the commission set provisional import tariffs of up to 73.7 percent for heavy plate steel and up to 22.6 percent for hot-rolled steel coming from China.
The investigations are set to conclude in April.
In anti-dumping cases, the commission typically has up to nine months to determine whether there are grounds for imposing provisional duties on a product and then a further six months to determine whether duties should apply as long as five years.