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Citroen to go down-market, but DS to shine

Hi five: Citroen’s local DS range (DS5 left) will be PSA’s premium brand, making the C-Line models the French brand’s value offering.

Citroen to be PSA’s budget arm while Peugeot and DS brands go upmarket

Citroen logo21 Aug 2013

CITROEN Australia will focus heavily on its premium DS range as its parent company prepares to re-purpose the next generation of its C-line cars as ‘value’ offerings.

PSA's strategy involves pushing Peugeot into more premium territory to compete with Volkswagen and lower-end offerings from Mercedes-Benz and BMW, while maintaining Citroen's DS sub-brand as a stylish, upmarket Euro alternative.

Citroen's C-Line of cars, that includes the C3 light hatch, C4 small car and C5 mid-size range, are set to become lower-budget options, similar to the positioning of Skoda and Seat in the Volkswagen Group.

PSA has already split the iconic French brand’s design studio in half, with one side dedicated to DS and the other to C-Line.

Speaking to GoAuto at the launch of the DS3 Cabrio last week, Citroen Australia general manager John Startari said the realignment was part of a long-term strategic plan and would not affect the current generation C-Line passenger cars.

“The Group doesn't want C-Line and Peugeot range competing head-to-head,” he said. “DS is the natural premium brand and that is going to occupy space on its own and the intention, long term, is to move the C-range to more a value proposition and Peugeot to be the premium range.

“That requires more than words and pricing, that’s a whole product cycle so I can’t imagine that is going to come into place for at least two to three years.”

Mr Startari said the European strategy won't necessarily be replicated in every market, and highlighted Japanese car-makers Mazda and Subaru as examples of brands that are seen as somewhat premium in Australia but viewed as entry-level brands in other markets.

“We do have the ability to tailor, through spec and options, our own strategy in this market and the French are very supportive of that. They are definitely looking to go global and I think the European crisis has fast-tracked that, but they think local which is important.”

As previously reported, Citroen will introduce a bespoke concept for its DS line in local dealers from January 1 next year that allows buyers to build their own DS model by choosing different cabin trims, seat materials, roof designs and other options.

Mr Startari said the bespoke concept is unlikely to be impacted by the direction Citroen is heading under its new product strategy.

“I don’t think what we are doing today would be compromised even if we had to go down that (European) strategy because we are segregating DS.”

While the latest VFACTS sales report for July shows strong growth for DS in Australia, Mr Startari pointed out that the DS3 and DS4 models had come off low sales last year when the French brand was sold locally by former distributor Ateco Automotive, while the DS5 was launched late in the year.

Mr Startari said online, radio and TV advertising would be used in the coming months to promote the DS range in Australia and hinted at the use of pop-up stores that have become popular in Europe to gain traction with savvy buyers.

“We are focussing on DS, its what we want Citroen to be known for in this country. We have put a lot of effort into the customer experience because I think that’s what’s going to sell that car.

“They are appealing, they drive well, they are not a traditional Citroen-buyers' car and that has been demonstrated by conquest sales globally. Around 70 or 80 per cent of DS buyers are new to the brand,” he said.

Sales of Citroen's C-Line range of cars is not faring as well, with January to July C4 sales down 58 per cent on the same period last year, while just 90 C5 mid-size models have sold this year, a 50 per cent drop on last year's numbers.

Mr Startari said left-over stock of slow-selling variants during the transition from Ateco to new distributor Sime Darby in February this year was one of the reasons for slow sales, but the C-Line model range would be rationalised in the coming months.

While it is unclear what the model range rationalisation means for Citroen Australia, it could mean fewer variants in the range with a focus on higher-selling models.

The first model to benefit from this will be the facelifted C3 light-hatch range that launches in October, and will be offered for a lower entry-price than the larger C4 hatch.

Citroen is reportedly preparing to reveal the first of its re-aligned C-Line models in concept form at this year’s Frankfurt motor show, with speculation suggesting it will be a replacement for the C3.

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