Time to ‘rattle the cage’: Peugeot Australia

THE head of Peugeot in Australia has admitted the brand has “lost our mojo” and that it is now time to “rattle the cage” as a “genuine alternative” to its mainstream rivals, with a return to sales growth anticipated in the next few years.

In an interview in Sydney at the recent launch of the new Expert mid-size van – a model that marks Peugeot’s return to light-commercial vehicles, which were dropped in 2015 under previous importer Sime Darby – Peugeot Citroen Australia managing director Ben Farlow was frank in his assessment of the French brand’s position and performance in Australia over the past decade.

This includes the past two years under the distribution of Inchcape Australasia, which took control of the PSA Group brands (including Citroen) from Sime Darby Motors in 2017.

“For the last 10 years, we’ve been a bit absent and invisible in what we stand for and represent,” said Mr Farlow, who took the reins in September last year.

“A huge push for us going forward – and I think we’ve got the opportunity on both brands – is to recruit a whole new generation of customers and that’s wonderful, that’s that blank canvas.

“They don’t know anything, so there’s no baggage, there’s no barriers. We set the course.”

He also admitted that “over the past few years, we’ve lost our mojo as a brand … lacked courage and conviction of our brand proposition and, hence, have not captured consumers’ attention”.

“It’s now time to rattle the cage. We will no longer compete and inspire in traditional auto ways but rather bring a fresh, courageous approach to the way that we work together, communicate, bring new product to market and treat our owners,” he said.

“If you look at Citroen and their focus on suspension and comfort, there’s different types of offers in market, and what I love about what these two brands offer is they offer a genuine alternative.”

However, as far as new customers are concerned, Peugeot Australia is not looking to cast a wide net, according to Mr Farlow.

“Peugeot is more special and does not have to be, nor do we want to be, for everyone (in order) to be successful,” he said.

“Our model for growth is to unapologetically not appeal to all and, in the process, truly appeal to some.”

Asked when Peugeot expects to return to record annual sales and the high-water mark of 8807 units not seen since 2007, Mr Farlow said “it will take us some time”.

But he insisted growth is on the horizon, despite Peugeot’s volume shrinking by 16.3 per cent in 2018, to 2838 units, and 29.1 per cent in the year to date.

“I wouldn’t term our sales trend as going down, I think we’re quite flat, (but) our retail sales suggest that we are,” he said.

“Our VFACTS (results) in recent months have been under pressure, like most in the industry, as intent to purchase is on the decline. We all know the broader market forces at play driving that.

“But generally, and talk to the network, there’s a lot of confidence. They’ve been disappointed a little bit over the last few years in the amount of marketing activity and the support, but in terms of the product, they’re supremely confident. It’s all ahead of them.

“I think that we’ll buck the trend in the next few years, and regardless of what happens in the industry, I think our size matters less to us.

“If we are disruptive, if we challenge convention – there’s no reason that we can’t, we’ve got permission now to do so – I think industry trends will be a little influence on us.”

Mr Farlow said PSA Group has “recognised we want to be successful in Australia” and is an active partner in the Peugeot brand’s relaunch.

He said: “Even though we’ve been here for as many years as we have, I’d like to think that Australia for both brands is what I call an ‘early stage market’.

“It’s like a launch, you’re not a mature market for these brands, because people don’t understand anymore what Peugeot represents, what it’s about, what it stands for.

“They’ve never been consistent and that’s why I think sustainability is most important. My focus over the next one-to-two years is to shore that up and move forward brick by brick, rather than fanfare and all you do is go up and down all the time.

“The way to address that is through consistently good product, and we’ve got good product now.

“Things take time as your reputation builds, both brand and product need to grow in parallel together.

“That’s why what’s coming tomorrow is as important as what we’re doing today.”

With Peugeot viewed as “more considered and understated” and Citroen “more independent and striking and colourful”, Mr Farlow said their competitors are not just fellow European brands, although both need to justify their premium positioning.

“We primarily now operate within the SUV segment, and the typical Australian mid-size, small-size SUV buyer is buying Japanese and Korean cars,” he said. “It goes without saying that Peugeot over time can be a genuine step up.

“We claim a price premium to what the typical Australian car buyer purchases … (and) we need to back that up.

“As we build brand value, we’ll start to appreciate what makes our brand better than any others in that segment that’s priced (lower).”

Asked why Inchcape has brought back three Peugeot vans to the market, with Partner and Boxer to follow Expert, Mr Farlow explained “it made sense … for two reasons”.

“One is because of that ambition for the brand in the market with SUV and passenger, to widen the range,” he said. “They both help feed each other.

“But also because they’re the number-one vans in Europe and they’re sitting there. Even though we might’ve done them in the past, they’re so successful, why wouldn’t you bring them into Australia?”

Mr Farlow said “vans represent a different type of opportunity” for Peugeot Australia, although he was hesitant to nominate a targeted market share.

“It’s something that we’re working through,” he said. “It’s steady as you go. We don’t have corporate business, we don’t play strongly in B2B (business-to-business) in our passenger cars, like a number of our competitors.

“We have some small B2B business with 308, but very small in proportion to our total business, so we’ve got to learn our way into large business customers.

“What that looks like in the years to come, in terms of a share goal, we don’t have a specific target, but we’re supremely confident knowing what PSA Group has been able to achieve in the last couple of years in Europe.”

As well as the new vans, Peugeot’s sales growth aspirations will hinge on current models such as the 308 small car – which Mr Farlow said he would like to see rivalling the high-volume Volkswagen Golf in future – and its SUVs spanning the 2008, 3008 and 5008.

Key future models include the new-generation 208 light hatch due next year and the new 508 mid-size passenger car which arrives in liftback form in the third quarter of this year, ahead of the Touring wagon due in the final quarter.