PARIS – While analysts feel more work needs to be done, PSA/Peugeot-Citroen SA says its efforts to differentiate its two brands is starting to show.
“The positioning of the two brands is a lot better coordinated,” Citroen Managing Director Frederic Banzet told Automotive News Europe. “Our factories share production, but we have strategies that are completely different, because with the same components, we can design cars completely differently.”
Steps have also been taken to reinforce Peugeot's and Citroen's separate identities so that the two brands don't overlap.
“Citroen is about technology, creativity, and innovation, and is bolder in a certain way,” Banzet said. “Peugeot remains the senior brand. It is essential to attract different customers.”
Some Peugeot and Citroen models still serve the same market segments. The Peugeot 308 and Citroen C4 both occupy the C (compact) segment, while the Peugeot 207 and Citroen C3 compete in the B (subcompact) segment.
But PSA is minimizing overlap by redesigning the cars at different times. For example, PSA launched the Peugeot 308 in 2007, three years after Citroen introduced the first-generation C4.
The new C4 launches next month and the 308 replacement will be introduced 2013.
To prevent Citroen and Peugeot from competing against each other, PSA last year put board member Jean-Marc Gales in charge of the two brands. Both Banzet and Peugeot boss Vincent Rambaud report to Gales, who has responsibility for the brands' marketing and product development.
Gales has made some progress. Citroen has begun to distinguish its brand from Peugeot, said Ian Fletcher, an analyst with IHS Global Insight. “Citroen is starting to see a return to the [colorful] nature it once had,” he said. “Peugeot, on the other hand, is still tackling the mainstream.”
However, Fletcher cautions that the two brands' identities remain a work in progress. “They say that they are not going to compete against each other,” Fletcher said. “But I can't take that seriously, unless they begin to price one model up or down versus a competing Citroen or Peugeot model.”
Even if PSA successfully differentiates its brands, the company cannot hope to match the economies of scale of larger rivals such as Volkswagen AG, Toyota Motor Corp. or General Motors Co.
Credit Suisse analyst David Arnold calls PSA a “structural laggard” because it has yet to form an alliance similar to Renault-Nissan or Fiat-Chrysler. Last March, PSA called off an attempted alliance with Mitsubishi Motors Corp.
Said Arnold: “In an industry where you need a million-plus units per platform, the situation is not exactly what you want to see.”