PSA Peugeot Citroen plans new strategy to push its two brands further apart, attracting analysts’ skepticism.
For a long time PAS has dealt with the problem of Peugeot and Citroen vehicles sharing very similar customer base. Last month, when PSA Peugeot Citroen presented its 2012 financial results, CEO Philippe Varin said “Our brands are too close.” In the near future Citroen and Peugeot will target two different ‘profit pools’ and customer groups.
Peugeot will focus more on customers who want a traditional type of car and two good examples are the new 2008 SUV-styled crossover and the 208 subcompact’s high-performance GTi version. With these two models the automaker is confident it will win higher profit margins.
On the other hand, Citroen will focus on expanding its upscale DS line to reach bigger profits and it will position mainstream models from the C1 to the C5 (the C-line models) slightly lower compared with the current models. All these mean that PSA has given up its three-level strategy for Citroen to have C, DS and Entry models by merging the first and last models.
“We believe this strategy makes sense overall but carries substantial execution risk and could take many years to bear fruit,” Fitch Ratings said in a statement on Feb. 25. “In particular, we are concerned that the existence of both entry-level/basic models and aspiring higher-end products within the two brands will not be easily understood and accepted by customers.”