The success of Peugeot's 206 CC coupe-convertible may radically change the way that niche vehicles are planned and produced in Europe.
The key to making the project financially viable was the decision to build it at PSA/Peugeot-Citroen's plant in Mulhouse, France, rather than at one of Europe's independent coachbuilders.
Now other carmakers have the same idea.
The 206 CC debuted as a concept car called '2-0-heart' at the 1998 Geneva auto show, previewing the 206's styling themes. But the coupe-convertible version was not yet approved for production. At the time, PSA CEO Jean-Martin Folz made it clear that niche products from Peugeot and Citroen not only had to boost brand image, they had to make money.
Peugeot wanted very much to produce the 206 CC. But the only way to do it profitably was to build more than the 15,000 to 20,000 units of niche models that volume makers typically produce.
To many, the idea of mass-producing a folding hard-roof system as sophisticated as the one on the Mercedes-Benz SLK was sheer madness.
Folz's plan was very ambitious: offer a 2+2 supermini with a retractable steel roof at an affordable price - under FF100,000 at the time, today about E15,000. To do that Peugeot figured it needed to make 80,000 units annually. Folz bet - maybe even gambled - that the target was achievable.
The production version of the 206 CC appeared two years later, again at Geneva, and went on sale in November 2000 at slightly over E16,500. That was 10 percent above the target price.
Production started in October 2000, but the ramp-up was very slow because of quality problems with the Heuliez roof system. Only 2,314 206 units were built by the end of 2000, which delighted many competitors and independent coachbuilders. They were sure that a carmaker could never build such a complicated niche product efficiently in a mainstream plant.
But by the summer of 2001, the 206 CC had reached its planned capacity of 400 units a day. Production for the year was 78,820 - not far from the initial target of 80,000.
The 206 CC's success appears to confirm that a niche product can be built in high volumes by a carmaker in its own plant. It also helped the 206 family set new records. The jump from 737,234 units in 2000 to 820,085 in 2001 was almost entirely due to the coupe-convertible.
Building it in Mulhouse along with the 206 hatchback proved to be the right choice. Sales of cabriolets and spiders depend on the time of year. With a dedicated line, production declines and manufacturing efficiency suffers during the winter months. But by building the 206 CC in one of its own plants, Peugeot can simply make more 206 hatchbacks when 206 CC's popularity declines.
Peugeot will repeat the 206 CC formula on the upcoming 307 CC. The car will be built in-house, but with the roof system this time coming from CTS/Car Top Systems of Germany. A similar approach is also planned for Citroen's production version of the Pluriel, which is based on the C3.
Other carmakers are adopting the same philosophy. Renault won't make coupe and cabriolet variants for the second generation Megane, but rather offer a coupe-cabriolet with a retractable metal roof.
Opel-Vauxhall plans to do the same for the next Astra coupe and cabriolet. It will build a single CC version, most likely produced in-house.
On the other hand, Ford's StreetKa is following the traditional path for niche vehicles. Pininfarina will build just 45,000 StreetKas over three years. Insiders say the StreetKa won't be priced at less than E15,000, giving it a very limited price advantage over the 206 CC despite offering a less sophisticated canvas roof.
It is not yet clear which carmaker has the right strategy. The Peugeot 206 must show it can maintain 80,000 units per year for at least 2002 and 2003. The Ford StreetKa won't be on sale until next spring. But I tend to believe that Folz has won.
By increasing volume and consequently reducing the price, competitors must do the same. If they offer a competitive price but produce at low volumes, they lose money.
The winner is the consumer, who gets very sophisticated small convertibles at affordable prices. The losers are coachbuilders, who see carmakers taking in-house the niche products that made them famous.