Vincent Cobee, the CEO of Citroen, says a series of crises that have rocked the automotive industry in recent years represent an opportunity for the 100-year-old French brand "to be extremely relevant again." With the Ami electric quadricycle and the new Oli concept, Citroen is seeking to offer a pathway to affordable, responsible and fun electric mobility. Cobee, who held international executive positions with the Renault Nissan Mitsubishi alliance before joining Citroen, spoke with Automotive News Europe News Editor Peter Sigal about the role he thinks the Stellantis brand can play in the future.
What was the thinking behind the Oli?
At Citroen, we want to be accessible, we want to support well-being, and we want to be audacious. When you do a concept, you are not only trying to make a statement, or place a flag, but you also want to show a way to get to the flag. We are in a place where freedom of mobility is important -- COVID was proof of that -- where economic tensions will increase and where the energy transition is a reality. We have only one planet and resources are constrained. So, we put that on the table and said, "Let's not solve every problem." With Oli, we are not intending to make an emphatic statement on aerodynamics or on future body types. We want to make a statement on affordable, responsible electric cars that exude freedom.
Why did you choose a utilitarian design rather than a sports car or a sleek pod?
Life is not made of gray pods that are moving anonymously in the city. And Citroen is not a sports car brand. (Citroen designer) Pierre Leclercq and I share one thing, which is the relationship between form and function. I'm a civil engineer by training, so to me form defines function and function defines form. We wanted the Oli to say "recycleable, affordable, attractive and efficient." So, that leads to form equals function. For example, the vertical windshield glass makes a statement: Great visibility, less material, less weight, very easy to manufacture. If it comes out in a polarizing way, that's fine.
Name: Vincent Cobee
Title: Citroen CEO
Age: 54
Main challenge: Ensuring that the Stellantis volume brand remains relevant and profitable in the face of the transition to electrification, inflation and parts shortages.
The C3 small car, which continues to be powered by an internal-combustion engine and is on an older platform, remains Citroen’s best-seller. What will the replacement look like?
The C3 is an attractive, modern, functional, affordable car. We recently looked at how much a car costs versus people’s spending capability. The average car in France is 17 months’ worth of minimum salary. For the C3, that has decreased to 9.5 months from 11.5 months in the last five years. Why? Because of efficiency of production, and it has become more affordable over its life cycle. So, that is the role of the C3 -- we participate in accessible mobility.
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When will it be replaced?
We have freedom from the rest of Stellantis' brands in terms of platform and timing of the replacement. That is because we want to take the time to find a solution for an affordable electric car. We will replace the C3, not next year, but very soon.
Could the New C3 small car, which was partly engineered, launched and produced in India, be a potential replacement?
We are embarking on the Smart Car project to address the heart of the market in fast-growing markets: India, Asia-Pacific, North Africa and South America. That project focuses on Citroen brand values, local relevance as well as attractiveness and affordability in those markets. The average transaction price in India is less than 10,000 euros. The program was a challenge, but it also widened our book of capabilities. Those cars can't be homologated as they are in Europe because of specifications but also customer expectations. But they provide us with a library of knowledge, of cost base, of suppliers for us to build our entry offer in Europe. We look at the Smart Car project as we have broadened our skills, and those skills will be used to fight a different battle.
What are your market share and volume goals in India?
I have been involved in India for quite some time, with Nissan, Datsun, Mitsubishi and now Citroen. You need to develop and source locally. It is a very diverse and volatile market, so the name of the game is to minimize your original capital expenditures. We have used an existing powertrain plant, we are using an existing vehicle plant, we are using local partners, we are using an evolution of an existing platform. We also have a very structured and progressive sales network development approach. The whole infrastructure -- plants, distribution, sales and maintenance -- will grow in proportion to volume and not ahead of volume, again to avoid an imbalance with capex. We will launch three models, one each year, based on the Smart Car project. Gaining market share in India is a very complex game, and we will play it the best we can. But we are not going to set an objective and take the risk of collapsing the business model to reach it.
Citroen has aspirations to become more international. Which markets have the most potential?
Seventy-eight percent of our sales are in Europe -- that’s down from 85 percent. Regarding potential, you have quantitative and you have qualitative. For quantitative, you have Brazil, Argentina, India, Turkey, then Egypt and Morocco. For qualitative: Japan, which is probably our best brand execution in the world. I know Japan quite well as a market, and it’s very interesting to see what Citroen has achieved there. China has potential in both areas. We have doubled sales in China this year, in very different conditions from the rest of the world. China will probably enter the top 10 again for us in volumes.
Why not seek to be just a regional champion in Europe?
For two reasons: One is regional volatility. Europe has been affected by COVID-19 and the chip shortage the most. So, expanding is a hedge against the European market’s trend downward. It's not unreasonable to expect that the European market will go down by 30, 40 percent in the next 10 years. Expansion is a way to protect the brand's volume and our employees. Also, trying to be competitive in more than one region provides valuable lessons. India is a great place to learn how to improve competitiveness. Latin America is a great place to learn how to improve branding. Africa will provide a great opportunity to find ways to improve the durability of our vehicles, while China is a great place to learn how to improve technology, especially consumer electronics solutions. I'll give you an example: Whenever we talk about innovating in the HMI (human-machine interface), I always say, "Why do you limit your benchmark to Europe? China is the benchmark."
Have we reached a high point in terms of sales in Europe? And if so, how are you planning for reduced volumes?
As a company, we need to have a very lucid view of the potential risks in the market. So, let’s say, 10 years from now, total volume in Europe will be from 10 to 16 million. You need to have a 10-million scenario, and you need to have a 16-million scenario. Either way, it will be 90 percent electric. This has an impact on the way you look at industrial investments, this has an impact on where are you going to manufacture the non-electric propulsion systems and vehicles, and the answer is: Probably not so many in Europe. As a brand the subject is a bit different. Today, we make cars, we sell them and we maintain them as long as the customer is good enough to come back and visit our showrooms. It's a bit of a “fire and forget” attitude. We basically let others catch a large part of the value of the business. This is raising an number of issues in terms of our own business sustainability. Are we a product company, or a service company? Maybe in the future we will lease the same car three times, then recycle it ourselves.
Many think Europe is heading into recession. How do you plan for such a scenario?
I have an order bank of more than five months of sales. I have massive issues in terms of deliveries because of COVID, chips and logistics. I have some customers who are are getting their cars delivered one month, two months, three months later than promised, even if the average delivery time promised today is five or six months. But even though it’s chaotic, you could say it's a bit of a dreamland for carmakers. We have been fighting each other for years, and now there's a situation where there is more demand than supply. But nine to 12 months from now you could imagine we will be in recession, at which point the private sales channels are going to collapse and B2B channels are going to be more price- and sustainability-sensitive, which will raise a massive question about how will we finance the shift toward electrification. We are riding a wave, but there are rocks where the wave will break. To be clear, I don't have the answers. If someone says to me, "I would like to invest 50 billion euros to increase capacity and deliver the pipeline of orders," would you push that button? Probably not. So you are going to frustrate customers for a number of months, because it makes no sense to invest on a 10-year basis for a situation that will probably last nine months.
In the past Citroen has had very ambitious sales targets that weren't met. How do you define success for Citroen?
In the short term, we are looking at European market share and profitability. We have an established home base and we need to hold the fort, under massive pressure from market size evolution, regulatory changes, price inflation and cutthroat competition. In the midterm, I want to rebalance Europe vs. non-Europe sales, so moving from 85-15 percent to 67-33 percent, and I want to protect affordability while supporting the transition to electrification. Long term, I want us to be relevant for society. The Oli concept is a large part of what we want to be. We want to an exhilarating, motivating, electric, sustainable, responsible, innovating, surprising brand. This isn't anything new. I could have said the same thing 80 years ago. Then the 2CV came out, the Traction Avant came out, the DS came out, the Mehari came out. We want to be in sync with society in the same way.
This year you have discontinued combustion-engine versions of the Berlingo passenger van in favor of electric-only, as have Peugeot and Opel. Was it disappointing to lose that volume from a very popular model?
When you see that there is a trend of moving toward electrification, at some point you need to decide on when you can and should do it. When we made that decision we had nine months' worth of orders for those vehicles, and we know that 12 to 18 months down the road those vehicles will become a complex subject in terms of CO2 because of their weight and aerodynamics. So, at some point it's better be ahead of the game than behind it. There were some frustrations from customers, but the penetration of the EV Berlingo is higher than we could have predicted. Let's be honest, we don't have enough chips to make every car. So, if there had to be a time when we could do it, maybe that was the proper time.
What have you learned from the Ami quadricycle?
We have transferred some of the ideas from the Ami to the Oli concept -- symmetrical doors and front and rear bumpers, a simple interior, the potential to accessorize. But more broadly the Ami brought the realization that there are some spaces in urban mobility that were not being addressed. Second, it gave us courage to do different things, but always with consistency and identity. Third, it shows us a path to a new business model.
Zero-emission urban mobility has yet to be solved. Electric scooters and bikes can be chaotic, and dangerous. And then you have increasing restrictions on cars entering cities. If you push that too far, the only people who will be able to get in are those who can afford an EV or a plug-in hybrid. The Ami comes from this intention to say that proper urban mobility should be affordable. Then there was the decision to display the Ami in FNAC and Darty (electronics and appliance stores), which generated disagreements. But in the end we sold half of them online, purely website based. We really learned a new way of marketing to a new audience. Social networks are fundamental for online sales; while our dealer network remains necessary for discovery, delivery and service.
Will there ever be a really significant market for this kind of transportation?
For me, we have limited the Ami to very specific usage: 45 kph, two seats. One question we haven't yet answered is: Is there a space between the Ami and an A-segment car (minicar)? Is there a four-seat, bigger interpretation? The regulation is extremely tricky, especially in terms of drivers’ licenses. If you assume the average B-segment (small) electric car costs about 32,000 euros, and the Ami costs 7,000 euros, there is a massive gap.
Is there anything you would like to add?
Every crisis is an opportunity. For the last three years there has been a succession of crises: COVID, the chip shortage, the shift to electrification, inflation. Society is expecting answers to questions about ecology, the economy and responsibility -- but we also have dreams, happiness, joy, excitement. Many of our competitors are still talking about size, features, weight, speed, equipment, but we believe we should talk about recycled materials, family happiness, innovation, lightweight and so on. That gives us a chance to be relevant. Maybe not for everyone, but that's OK. I'm OK to be loved by 20 percent.
