Citroen counts on India, China for future growth

PARIS -- Citroen expects China, India and a continuing focus on SUVs will help the brand to reach its new sales goal.

The brand has lowered its 2022 sales goal to 1.3 million vehicles from 1.5 million, largely because of the closing of the Iranian market, which the brand had planned to enter before the U.S. withdrawal from the nuclear agreement.

Citroen CEO Linda Jackson said the brand would reach the target by developing a new market in India with locally produced vehicles, revamping struggling Chinese operations and continuing to launch successful new models such as the C3 and C5 Aircross SUV models.

Citroen's global sales fell 5.1 percent to 992,800 last year.

Jackson will take on a new strategic role within parent PSA Group after leading Citroen since 2014, as PSA prepares for a merger with Fiat Chrysler Automobiles. Citroen's new boss will be Vincent Cobee, a former Renault-Nissan alliance executive.

The European market was a bright spot for Citroen last year, with sales up by 1.2 percent (Citroen includes the EU, the EFTA countries, and Balkan countries in the region).  Sales in the EU and EFTA were up by 6.4 percent to 636,843, according to the trade group ACEA. Jackson said that Citroen's market share rose to 4.9 percent from 4.7 percent.

That growth was not enough to offset steep declines in China (down 55 percent to 51,200 sales) and Latin America (down 15 percent).

"We are in the process of rebuilding China," Jackson said on Jan. 16 on a conference call with analysts announcing 2019 sales figures for PSA. Jackson said PSA's "Vitality" turnaround plan with joint venture partner Dongfeng was being put into place. That includes "new organization, new products, new dealers," she said.

Citroen will launch the C5 Aircross SUV, including a plug-in hybrid version, in China this year, as well as the Citroen C3L, a small sedan that replaces the Citroen C-Elysee sold in China and emerging markets.

About 84 percent of Citroen's sales in 2019 were in Europe, an imbalance that Cobee, the incoming CEO, aims to address. In addition to India, Jackson said there were "other markets" that Citroen could expand into. 

"We have all the steps in place for internationalization," Jackson said.

Iran, however, will not be one of those new markets. In 2016, soon after the Iran nuclear agreement took effect. Citroen signed an agreement with its Iranian partner Saipa to produce a range of Citroens, much as Peugeot had done with its partner Iran Khodro.

After the U.S. withdrew from the pact in 2018, PSA and other foreign automakers pulled out of Iran. PSA sold 444,000 vehicles in Iran in 2017, nearly all of them Peugeots, but stopped recording sales there in the second half of 2018.

Jackson, a British national, said she would not comment directly on her next role at PSA, where she will be asked to evaluate brands and report to CEO Carlos Tavares. But she said that Citroen was in a stronger position now than when she took over in 2014. 

"Citroen didn't really have a proper product plan," she said. "Its positioning was unclear. It had lost its way."

Since then, she said, Citroen has introduced a "core model strategy" that has streamlined the brand's lineup and introduced SUVs, and prepared Citroen to meet EU emission standards with electrification, including the plug-in hybrid C5 Aircross and the coming C4 Cactus replacement, which will have a full-electric version.

"Everything is in place, and I wish Vincent (Cobee) lots of luck," she said.