Peugeot CEO Linda Jackson: 'I'm inheriting a healthy brand'

Linda Jackson, formerly the CEO of Citroen, has taken on that role at Peugeot after the creation of Stellantis in January 2021. The brand was PSA Group’s European flagship, with growing sales and pricing power thanks to a lineup switch to SUVs from minivans in the mid-2010s. Jackson’s challenge is to maintain that strength in Europe but grow in the rest of the world, now that a move to North America is off the table. She spoke to Automotive News Europe Editor and Associate Publisher Luca Ciferri and News Editor Peter Sigal about expansion, electrification and the chip shortage.

You have been CEO of Peugeot for less than a year after moving from Citroen, and then some time working on the Stellantis integration. What have you learned about the brand?

I'm inheriting a healthy brand. It was No. 2 in Europe at the end of August [and at the end of October]. So, it is a solid brand, with good results in Europe, with a strong product portfolio and a coherent strategy. But there's always something that we can improve on, or that we think is a real opportunity. For Peugeot, that’s to become more international.

Where do you see potential for growth?

There are three major areas where we can grow in the short and midterm. The first one is South America; the second is the Middle East and Africa; and the third is China. I think we will succeed because we have a global brand and a global product portfolio. For example, the 208 that you see in Europe will be a major part of our growth in South America. But we have also developed a couple of specific products for those regions, such as the Landtrek Pickup. It’s been developed specifically for markets such as South America and Middle East/Africa, where the pickup market is quite large.

What percentage of your sales are in Europe versus the rest of the world, and what is your target?

Today, 80 percent of our sales are within Europe and 20 percent outside. I don't want to completely flip this because our strength clearly is Europe, and I want to increase our market share here. So, I would say probably it goes more to 70-30. And that is totally dependent on how quickly we rebuild in China, and to be honest, we are not going to quickly rebuild there. We need to introduce a product portfolio that is really relevant to the Chinese consumer, which I think was a failing in the past. And we need to completely restructure our distribution network -- you don't do that overnight.

Going back to Europe, is Peugeot now the benchmark in pricing power for volume brands?

Yes. We have worked tremendously hard over the past 10 years [to increase pricing power]. But it's not just about increasing prices, it's about bringing value to the product, adding the right technology, making sure you have got the right specifications and, of course, the look of the vehicles and all of the work we have done on residual values. All of that helps the pricing power.

Is Volkswagen brand still the benchmark for Peugeot or has it changed over time?

Volkswagen is obviously the leader in the market, and they have to be who we are benchmarking ourselves against.

In the latest Stellantis presentation, it shows that Peugeot was 1.5 points above the pricing benchmark in 2020, starting from 2.4 percent below in 2015.

This can change depending on when you introduce new vehicles and when Volkswagen introduces new vehicles. But plus one point/minus one point [to the benchmark price] is our thinking as we move forward. I'm not looking to continue to raising prices, because I think we need to make sure that our products are accessible to as many people as possible, but we need to maximize the value of the brand and the plus one/minus one is about right.

With a lack of product but also increasing prices due to the chip shortage, are you increasing the gap on VW faster, or is it a level playing field for everyone?

With the semiconductor crisis, the push for electrification and raw materials inflation, we are all facing exactly the same issues. Are we closing the gap in terms of volume? We have a long way to go, but we are closing the gap. Even so, it can change from month to month, depending on your supply of semiconductor chips, or year by year when you introduce a new vehicle. But obviously, I would love to shorten the gap between us. I'm sure Volkswagen would like to lengthen the gap.

How are you managing the chip shortage? Have you had to make compromises?

We are managing it like every other crisis, because there is always one in the automotive industry. We manage it on a Stellantis group basis, and we are managing day by day, factory by factory, model by model. We are trying to find the best solutions to be able to deliver vehicles to our customers. For example, we replaced the optional digital instrument cluster on the “old” 308 with an analog cluster, because that model was on runout. But that’s not possible for the new 308, which in the interior is all about the evolution of the i-Cockpit, with the 3D digital cluster and AI Connect. So we are trying to protect the new 308, and we are ramping up production gradually so we can produce and deliver vehicles, with a launch in France this year.

We have been told that the average waiting time in Europe is between nine and 12 months for a normal car, and can exceed a year if it's a special order. Is that correct?

It depends on the model, on what the customer is asking for, on the version, especially if it’s a high-end version that needs a lot of chips. Across all manufacturers, it can vary from two months to a year, but the higher the performance of the model, the more chips it has. Therefore, the more difficulties you have in terms of finding the chips to be able to build it.

Do you have any anecdotal or hard sales data showing that car buyers are frustrated by long wait times?

If you were to ask any customer about any manufacturer, they would say they want their car tomorrow. Inevitably, the problem is that whichever manufacturer you go to, they all face the same crisis. Unfortunately, this is where we are, and we don't know when it will end. We hope it's starting to ease. But this is why we want to move to being more the owner of our components and our battery supplies as we move into electrification.

Does Peugeot have a timetable to go electric-only?

We have to be careful because we are a global brand. I can make an announcement for Europe, but there will be a different speed of transformation for other regions, for example Africa, so I still need to make [internal combustion vehicles] for those buyers. Today, 70 percent of my models have an electrified version, whether hybrid or [full] electric. By 2024, 100 percent of our models will have an electrified version. At this stage in the transformation, we are using multi-energy platforms, so I can have internal-combustion only vehicles, I can have a hybrid or an electric. That is right for Europe at the moment, and it also supports international markets that will make the change later. As we move on to the new [Stellantis] platforms, STLA Small, Medium, Large, by 2030 in Europe, all of our models will be electric. But I still have to make sure I maintain internal combustion offerings for my international customers.

What percentage of sales of the 208 small car and 2008 small SUV have been full electric, and have you exceeded expectations, which were 10 to 15 percent?

We are at 20 percent electric for the 208. The e-2008 is slightly less than the e-208, because it tends to be a first car, so customers are often looking to be able to travel long distances. They are trying to decide if an electric car is appropriate for them.

You have got a very important model coming up, the next-generation 3008, which will be built at your plant in Sochaux and have a full-electric version. Will you also have an internal combustion version? Will that be on the same platform?

It’s a little bit too early to confirm exactly which models are going to be done on the STLA Small or STLA Medium or E-VMP, other than to say that by 2024, there will be a 100 percent electric version.

What percentage of Peugeot sales are online, and how do you define an online sale?

The first statistic is that we have is that 90 percent of our customers start the process of buying on the internet. It's no great surprise; we all do it for whatever we are buying. There is an online process that you can follow to virtually go all the way through the sales process, but the percentage [of people who do this] at this stage is relatively low. It's well below 5 percent. In the future there will be some customers who want to buy online all the way through the process, but we need to understand how to adapt the process if they want to touch and feel -- what we call a "phygital" experience, a combination of physical and digital.

Peugeot is in the Stellantis "upper mainstream" cluster with Opel/Vauxhall. How will that work?

Clusters aside, we are still working in the same way we did before, which is that there is technology available to all, and the brands chooses which technology they want. The benefit of the cluster is that both Opel and Peugeot tend to want similar technologies. We are trying to find synergies so that we can work together. And we are looking not only across Opel, but across all of the brands. The clusters are there to make sure we have got a clear differentiation between the brands so we are not all competing in exactly the same level. But at the end of the day, when we really look at it, we are looking for synergies that will benefit as many brands as possible so we can spread the cost.

Peugeot has full-electric models and plug-in hybrids, but no full hybrids. Does the market need this middle way, or are full hybrids a temporary solution, with complete electrification so close that you don't need them?

We think we can cover the transformation with full electric or plug-in hybrids. We will also be introducing mild hybrids in the future. Do you need a full hybrid without plugging in? I don't know the answer to that. I can only speak to what I know we are going to offer, which is plug-in hybrid, full electric and in the future, mild hybrid.

Peugeot is leaving the minicar segment, with Toyota taking over the joint venture plant you had with them in the Czech Republic to make the Aygo, the Peugeot 108 and the Citroen C1. Could Peugeot return to that segment?

It’s very difficult to find the equation to make that succeed, because as you move forward, it has to be electric, and therefore the variable cost has to be quite low to be able to have an accessible price. I believe that from a Peugeot point of view, we need to think of other solutions. We already have partnerships with Peugeot Cycles and Peugeot Motorcycles, and there is work that we will be doing to try and develop that business a little bit more so that Peugeot could have holistic, inexpensive mobility, on two, three or four wheels.