Citroen keeps its eyes fixed on the middle of the road

Paris/Cologne. Citroen will stay a mainstream carmaker and will not be sidetracked from its core business by launching super-luxury cars or off-road vehicles, said Managing Director Claude Satinet.

Moreover, Satinet said Citroen managers don't want to be reminded about the French brand's past when it was famous for avant-garde designs.

"Nowadays there is no money to be made with that," he said. "Design fantasies are only permitted if they are functional."

These days, said Satinet, passenger comfort has top priority and Citroen wants to set new standards regarding practicality and "sensible engineering."

"All new Citroen models must be capable of winning over the majority of European customers," he said.

Neither is Citroen planning to make a push toward the super-luxury category.

"We will not start a competition with the VW Phaeton," said Satinet.

And there won't be any Citroen off-roaders, either.

"There is not enough demand in Europe," said Satinet.

For example, a joint project with Toyota to build a car on the platform of the Toyota RAV 4 sport-utility was abandoned.

But major Citroen projects going ahead include the new C1 mini and the C6, a large coupe limousine. Both will be launched in 2005.

Satinet believes that Citroen's main rivals are Volkswagen, Opel and Ford. But he is convinced that a clear distinction between Peugeot and Citroen within the PSA group is the secret of Citroen's recent success.

Satinet believes PSA's strategy is more logical and consistent than that of the VW group.

"In comparison to the Germans we [Peugeot and Citroen] strictly act as competitors. There will be no joint showrooms," he said.

Regarding new-model planning, Satinet said PSA makes sure that both brands' new cars are never launched at the same time.

In the first six months of the year, Citroen managed to maintain its European market share of 7.2 percent within the passenger car and commercial vehicle sectors.

Also in the January to June period, Citroen sold 726,000 vehicles worldwide -- a rise of 10.7 percent compared with the same period in 2002. In Europe there was a growth of 7.4 percent; outside Europe the growth was 29.2 percent. In Italy alone, Citroen's sales increased by 78.9 percent while domestic brand Fiat lost ground.

Satinet's aims remain ambitious. By 2006, Citroen hopes to increase its western European market share to more than 8 percent. Satinet is confident that this year's target of 1.35 million to 1.4 million unit sales worldwide will be reached.

Citroen's current sales surge is being fuelled by the C3 supermini and the highly flexible Pluriel derivative.

By 2006, Citroen hopes to reach worldwide sales of 1.6 million vehicles, including commercial vans. This would equate to a 40 percent share of the PSA group's global sales target of 4 million units.

Citroen also has big plans for the Chinese market where it has a joint venture with its partner Dongfeng. Citroen sold more than 85,300 cars in China in 2002 -- a rise of 60 percent. The target for 2003 is 110,000 to 120,000 cars. Satinet's medium-term target is to achieve sales of up to 300,000 cars.

"China could become our most important market," he said.

But there are already production bottlenecks in China.

"We cannot reach our targets with only the Wuhan plant," said Satinet.

Therefore, Citroen is currently in discussion with Dongfeng about "how we can build a new plant in China,'' said Satinet.

But despite recent speculation, Citroen has no plans to enter the US market,

"We have never announced our intention to enter the USA," said Satinet. "In any case, there will be no suitable Citroen car project for the next 10 years."

Satinet said he is dissatisfied with Citroen's performance in the German market, where sales growth in the first half of 2003 was 1.1 percent. The French brand's market share was 2.1 percent.

"I am very impatient to improve our performance in Germany," said Satinet.

Satinet said Citroen is not sufficiently represented near major German cities. But the company will continue to have independent sales partners. Only in exceptional cases will Citroen open its own dealerships -- for example, "if no dealer who is prepared to make an investment is found within a certain area," said Satinet.

Satinet defended Citroen's policy of offering high discounts. He said: "We do it openly. Our competitors do it behind closed doors -- but at the same level."

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