By on March 14, 2013

PSA announced their renewed brand strategy for their Peugeot and Citroen lines, and the situation has finally been clarified after frequent back and forth reports that contradicted one another. It turns out that PSA will employ a three-tier approach that is equally confusing, with Citroen as the lowest tier with Peugeot on top. But then there’s also Citroen’s DS line, which is supposed to be upscale itself. Confused? So are we.

A hand cheat sheet provided by PSA to Automotive News Europe outlines the “values” supposedly embodied by both Citroen and Peugeot.

PSA CEO Philippe Varin recently outlined the new product strategies for Peugeot and Citroen like this:
Citroen stands for:
Fuel-efficient and environmentally friendly cars
Easy-to-use, less sophisticated technology
Purist design
Peugeot stands for:
Perceived quality and reliability
Elegant, dynamic designs that stand out from the crowd 
Innovative driving experience and driving pleasure

PSA was adamant that Citroen was not going to become a low-cost brand, but the next generation of vehicles will be positioned slightly lower than the current range. Does that mean the Hydramatic suspension, one of the brand’s hallmarks, will be gone? Let’s hope not. What will be happening is that Citroen vehicles will be positioned as “cheap premium” (whatever that means), with Peugeot being “premium” and to top it all off, Citroen’s DS line will be positioned as an even more premium range relative to Peugeot, if Automotive News has it right, which is difficult to ascertain, since PSA seems to change its positioning depending on what day of the week it is.

Further complicating matters is Peugeot’s schizophrenic offerings, including the low-cost 301 sedan which will be sold in emerging markets as a premium vehicle relative to the other low-cost competitors, if you buy into PSA’s spin. It’s a tough one to swallow, considering that Renault has poured so much time and effort into Dacia for the precise reason that the low-cost and premium brands should not mix.

Keen French car observers will also note that the brand values espoused here are backwards. Traditionally, Citroen had the elegant, dynamic designs and wild new technologies, while Peugeots were rugged and simple enough to endear themselves to the pied-noirs of Africa. Outside of France and Africa, Peugeot’s profile is basically nil – if the Citroen C6’s poor sales were an indication of how poorly premium French cars were received  then the Peugeot 607 large sedan may have been the only offering to fare even worse, ending up largely in the hands of cab drivers.

The most succinct analysis of it all comes from Fitch Ratings, which noted

“We believe this strategy makes sense overall but carries substantial execution risk and could take many years to bear fruit. 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.”



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20 Comments on “PSA’s Brand Strategy: Let’s Make A Peugeot Sandwich...”

  • avatar

    Wow, no wonder GM found it attractive.

    Also, “perceived quality”? Does this mean more piano black?

    • 0 avatar
      juicy sushi

      And chromed plastic, to make sure the interior looks like a smartphone.

      • 0 avatar

        And Citroen’s value being “Easy-to-use, less sophisticated technology”? That’s throwing what Citroen has long been known for, sophisticated, awesome, but somewhat delicate technology. It’s like GM suddenly wants Cadillac to represent value, and Chevrolet to mean luxury and prestige.

        So, Peugeots now will be ‘perceived as reliable’? Not sure how to get there, without the car itself being reliable. But VW seem to have achieved that, at least in Europe.

    • 0 avatar

      I think “perceived” here is used in contrast to “actual” quality and reliability.

  • avatar

    Ok then. To all my friends who love French cara, unless something really changes, or they get that execution the analyst mention 110% right, PSA is gone. Or look for another round of nationalization soon. It seems the company is really lost and has not faced up to it either. If there are any grounds to this, it’s a the beginning of the end.

  • avatar

    Um… Pardon my ignorance and my waking-up crankiness, but isn’t that completely back-asswards from what the brands have traditionally represented with one another? That’s like if Chevy became the new Cadillac, and Cadillac started to sell sub 20 grand cars.

  • avatar

    I suppose it sort of makes sense if you’re following corporate history. Yes, Citroen made the DS, but it also made the 2 CV. Also, a return to reliability and conservatism for Peugeot wouldnt be a bad thing. This strategy is still wrong of course — aside from us, nobody cares about history, past a point. Citroen should go all in towards upmarket, while Peugeot should go more for the middle and bottom. Theyre making it a little too complicated

    • 0 avatar

      I could even understand if they wanted Peugeot to be the upscale brand and Citroen the mass-market one. The thing is, they need to make a choice. Period. By having these two be sort of “co-brands” for so long, they’ve really crippled their ability to compete with other carmakers and wasted a lot fo money doing so. They need a simple two-brand strategy and start moving forward. And this “Peugeot sandwich” strategy will only confuse everyone and solve nothing.

      And if they’re worried about sullying the good brands of Citroen or Peugeot with a Dacia-like brand, they could always bring back Simca. They could even team it up with Peugeot like Dacia and Renault.

      • 0 avatar

        Simca are also remembered in Brazil and I venture Argentina so it makes it that much easier to relaunch in na área of the world they need to get traction in.

      • 0 avatar

        Bringing back Simca would make sense, then they could do a three-tier structure (and fight out whether Citroen or Peugeot gets to be at the top, none of this treating DS separately from the rest of Citroen nonsense), but I would wager that Peugeot Citroen really doesn’t have the money to invest in launching a completely new marque at the moment. This new strategy is probably seen as a cheaper alternative.

  • avatar

    “Peugeot stands for:
    Perceived quality and reliability
    Elegant, dynamic designs that stand out from the crowd
    Innovative driving experience and driving pleasure”

    How far removed from reality are these people? That list is exactly the opposite of what Peugeot currently stands for. The cars are not known for being well made or reliable, but for being poorly assembled and rather troublesome. The designs are far from elegant or dynamic, and their mainstream models (208,308,508) are all based on relatively elderly platforms which make them very, very average to drive. These are not qualities befitting a “premium” brand.

    PSA would be better served by ditching the Peugeot brand entirely, and focusing on the future of Citroen.

  • avatar

    They did not even get that right… It was not particularly difficult to work with what they started: citroën gets the bread of the sandwich, peugeot the filling.
    The DS line should be the sole premium offering of the group, Peugeot should have got back to “traditional values”, which they should never have left aside, and Citroën gets the affordable no-nonsense innovative cars. (still sell the 301 as a peugeot in Africa because of brand recognition)

    The plan was easy, nice, already going, there was only one flaw in it: Peugeot would have got the worst role of the three, a declining market whereas low-cost and premium are growing. This was simply not acceptable to the Peugeot family who owns PSA: the second brand should not overtake the first. Even if that means to stupidly kill both of them. That’s how stupid it looks now.

  • avatar

    Utterly ridiculous. How can you charge a premium for a brand defined as “less sophistocated?” I have a feeling Citroen is made to fill this gap because the Peugeot family doesn’t want their name on the “cheap” cars.

    Citroen should drop their cheap models and focus on the DS range; they have the best chance of selling a premium/luxury image.

    Peugeot can be the solid mainstream offering to compete with VW, etc.

    Then they need a low-cost brand beneath that to go up against Dacia et al.

  • avatar
    car follower

    PSA could very well be a casualty in the industry in the next 5 to 7 years. Europe is overdue for a consolidating.

    • 0 avatar

      Consolidation could mean a number of things though. Merging Opel and PSA into a GM-SAPAR joint venture would still be consolidation, as would a Chrysler-PSA-Fiat ménage à trois. Europe does need to consolidate, but it doesn’t have to take the form of such a massive and globalized company going completely down the tubes. Moskvitch, MG Rover, and Saab were all very different stories.

  • avatar

    From the perspective of a North American who loves and owns/has owned Peugeots and Citroens this strategy sounds ridiculous. To me, Citroens were all about design and innovation; cars that appealed to your right brain and your heart. You could admire their shape and marvel at their audacity while you waited for the tow truck at the side of the road. Peugeots on the other hand, were about quality, durability and a no-nonsense approach to engineering; forged suspension links and all. Wisely, they left the styling to the experts at Pininfarina.

    Both brands had comfy seats and both brands also tried to have a full range. Were we talking only about one brand this would be easier. It strikes me that they’re trying too hard to mix and match. I think Peugeot should be the solid middle and lower with Citroen a premium brand.

    But then, what do I know? I haven’t seen a new one in over 20 years. Maybe Michelin can take Citroen again and let Peugeot sort itself out.

  • avatar

    Soo, Citroen = Pontiac, Peugeot = Oldsmobile, Citroen DS = Buick? Shades of GM influence perhaps?

    Actually, no, even at it’s worst, GM wasn’t quite this bad. If anything, the treatment of Citroen is more like the trick Ford attempted with Edsel’s positioning. The results were…mixed.

  • avatar

    As a Citroen fan I say Peugeot deserves a very bad fate for doing this. Very bad, as in worse than Mazda’s five-brand strategy from 1991…LOL :)

  • avatar

    Citroen’s novel suspension is hydropneumatic – not Hydramatic which is a GM auto transmission

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