FROM ITS dealers’ perspective, an expensive re-launch of Citroën could hardly have come at a worse time, but from Citroën’s perspective, it is a company that needs such a re-launch perhaps above all others.
Globally, Citroën seems to have lost its way, with a major problem in terms of what its products represent. In the Irish context, the brand is linked with a disastrous discounting initiative that left many customers with a very sour taste in their mouths as they discovered their second-hand values were dropping by the day.
The fact that a number of dealers have been exposed by the Competition Authority for their parts in a price-fixing scandal has done nothing to help either their brand or their business.
In 2006, during a boom period for the industry, Citroën sales here dropped by some 23 per cent as the company discounted new car prices heavily to bring in market share. In turn, those who had bought Citroën cars – often a passionate rather than a pragmatic choice – saw their cars’ value drop like a stone. It was a very short-sighted campaign – Ireland soon became the third-worst-performing market for Citroën – and one which will still take a long time to rectify.
“It was a disastrous policy that did not work,” concedes Paul Cregan, the managing director of Gallic Distributors in Ireland.
Then a senior inspector from the Competition Authority said that it had come into possession of minutes from meetings where dealers agreed to fix the price of new and second-hand cars. The Citroën Dealers Association “policed” the cartel to ensure dealers would not break the agreement, and there were even fines in place. The damage to their reputation was enormous. Citroën in Ireland is trying to move on but the local dealers’ relationship with customers will have taken a significant step backwards.
However, sales did increase substantially last year, mainly due to the fact that Citroën now has more cars than any other manufacturer in the A tax band of €100 a year. This is due to the fact that huge investment has been made in impressive direct-injection diesel engines. The C4 Picasso has been an impressive performer and the new C5 has had an impact, but the overall range lacks definition.
The company has now gone for a makeover. New signs – including a softening of the double-chevron logo – new showroom styles and experiences are on the way. More professional treatment of customers and the provision of clear information on delivery times and a detailed explanation of servicing and costs are all promised. It is a major effort to hold on to customers and to get away from a staid image. Citroën knows that in 10 or 15 years, there is every likelihood that the world’s markets will be struggling to compete with cars from China and India.
The first new model line-up out of the Citroën traps will be the DS range, which will eventually replace the C3, the C4 and the C5. The three-door concept DS Inside was unveiled recently and will be on show at Geneva. We now have an impression of what is to come. The influence of the hugely successful Mini is marked. Some Citroën purists are appalled by the fact that the name of the original and legendary DS should be resurrected but at least the company knows where its great success once was. These cars will come on stream from next year on.
There will also be a diesel hybrid car on sale in the next couple of years. This is quite an exciting development and it is likely to be the DS 4 or 5 or a DS cross-over and will carry a premium price. The DS 3 on sale next year will be a three-door petrol hatchback but, as Citroën moves on to a new level, it will probably cost about 15 per cent more than a current C3. That represents quite a leap and quite a gamble for Citroën.