Thursday, 19 June 2014

Peugeot cuts models by half

Peugeot is to halve its model line-up over the next few years, reducing today's 26 different offerings to just 13.

It is part of the brand's ‘Move Upmarket' strategy and a determination to move into what it calls "profitable channels of distribution".

These include a greater focus on the retail market and those areas of the fleet sector which do not involve heavy discounting.

Once the slim-down is complete, Peugeot will have four small cars, five medium-sized models and four in what it calls the C-SUV/D categories.

The model range will still extend from the 108 to the 508, but with fewer niche models in-between. Peugeot claims every car will be suitable for every market in which Peugeot operates.

The 207 CC will be the first victim of the cull. When the company's small coupé-cabriolet reaches ‘end of life’ in the next few months, it will not be replaced by a 208 version. Factory space in Madrid where it is built will be turned over to Citroën production.

Maxime Picat, chief executive officer, says the precise composition of Peugeot’s future 13 models will be decided as replacements are introduced, depending on market requirements at the time.

"Ninety-four per cent of the models I sell are already represented by the cars we will focus on, and we will gain some sales by moving into new markets," Picat claims.

Peugeot claims it is currently undergoing a “revival”, led by Europe and Japan, although Russia and Latin America remain “problem areas”.

So far this year, Peugeot has sold 407,000 cars in Europe and 157,000 in China, increases of 14% and 28.4% on last year respectively. In both cases Peugeot's growth is double the overall improvement in the market.

Total sales in 2014 are currently 5.4% up at 683,000, with the 2008 poised to become the brand's best-selling car.

But Russia and South America continue to deflate, after posting reduced volumes in 2013, partly as a result of economic circumstances and partly through exchange rates, according to Picat.

"Argentina has stopped importing cars altogether and we were very strong there," he added. "We sold 100,000 cars in Argentina last year at prices 10% higher than those of Volkswagen." 

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