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February 05, 2015 12:00 AM

DS CEO wants upscale brand to have Audi-like impact

Bonnefont sees marque accounting for up to 15% of PSA's global sales

Luca Ciferri
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    Yves Bonnefont: "I will not be pushing volumes because I know that it could kill the brand."

    PSA/Peugeot-Citroen’s upscale DS brand is starting small but CEO Yves Bonnefont is thinking big. After selling 118,472 vehicles in 2014, Bonnefont hopes the division’s sales will eventually represent 10 percent to 15 percent of PSA’s annual volumes – up from 4 percent last year. Bonnefont, who became DS’ first CEO last June, shared his vision for the brand’s future when he met with Automotive News Europe Editor Luca Ciferri and Correspondent Bruce Gain.

    What is your sales target for DS?

    We are not commenting on volumes because I don’t want to be trapped by a sales target. That being said, when you look at the industry you find that the premium market accounts for 10 to 15 percent of the total worldwide sales. So it’s not crazy to think that in the midterm DS should represent between 10 and 15 percent of PSA’s total sales. That corresponds roughly to the proportion of Audi’s sales within the Volkswagen Group [Audi accounted for about 17 percent of VW Group sales last year].

    What metrics are you using to measure DS’ success?

    What I will use to develop the brand is the customer experience. I will make no compromise on the customer offering and experience. It’s the products, the networks and customer experience that will determine the speed at which we develop the brand. I will not be pushing volumes because I know that it could kill the brand.

    Meet the boss

    NAME: Yves Bonnefont

    TITLE: DS CEO

    AGE: 44

    MAIN CHALLENGE: Making DS one of the world's most profitable luxury carmakers.

    How does the U.S. fit into DS’ future?

    We will have three different formats to retail our DS cars: the DS Store, DS Salon and DS Commerce. We plan to implement DS Stores in the world’s top 200 cities. We are working with our dealer partners to define where we should have DS Store, DS Salon and DS Commerce locations.

    How many of the 200 DS Stores will be in the U.S.?

    Out of the 200, there are 30 cities in North America where we will be. It would be a bit strange to build a global premium brand without raising the question of North America.

    Will China or France be DS’ largest single market?

    It’s a question of time before China overtakes France as the largest market. Last year, we increased sales in China and Southeast Asia nearly sixfold [to 29,978] compared with what we did in 2013. Last year, however, we sold 73 percent of our cars in Europe [down from 85 percent in 2013]. This is not a good situation to be in because then you are overexposed to the cyclicality of the [European] market. One of my top priorities is to grow DS outside Europe. I have set the target of having at least 50 percent of our sales come from outside Europe by 2016. My priority is to use the existing version of DS6 to achieve the international development for the brand.

    AUTOMOTIVE NEWS EUROPE E-MAGAZINE

    This story is from the current issue of the Automotive News Europe monthly e-magazine, which is also available to read on our iPhone and iPad apps.You can download the new issue as well as past issues by clicking here.

    Some analysts expect you to boost annual China sales to 200,000 by 2017. Is that possible?

    I think that is very optimistic and ambitious, but the capacity of the Shenzhen plant is 200,000 units and, of course, we will do our best to fully utilize the plant. Again, however, I will neither manage the plant nor the brand based on sales. If we reach 200,000 units, that’s fine. If we don’t that’s also fine as long as we make sure that we offer the right customer experience and have the right brand positioning. That is what matters in the long term. And I am going to manage this brand with a long-term view. It’s the only way to build a premium brand. If you start to manage a brand with a short-term view, you are just going to fall short of your expectations in terms of positioning of the brand.

    Where does DS fit in the PSA family?

    DS customers care about the image they project with their car. The product positioning of the two other PSA brands are different. Peugeot is more about the pleasure of driving. Citroen is more about the feel-good experience you have in your car. When you look at the customer base, they are very different people for each brand. Of the 500,000 DS cars that we have sold, 300,000 were to customers who did not own a Citroen or a Peugeot before. That’s the most striking evidence that we are addressing a different segment.

    How does your dealership strategy and brand positioning in Europe differ compared with China?

    The more premium the brand the more global it is. That’s not only true in the automotive industry, it’s true in all industries. So we will have a very consistent and global positioning for the DS brand. It makes a lot of sense because it builds on our strength. One strength comes from Paris and using DS’ association with French culture and its savoir-faire. That’s how DS is positioned as a brand.

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