News

New Citroen UK three-year plan to boost market share, reduce haggling

Citroën UK has confirmed a “far-reaching and impactful” three-year strategy aimed to “unlock the full potential” of the French brand. 

The plan, which focuses on multiple areas of the business, is hoped to raise sales volumes which have taken a dramatic 48% year-on-year hit so far in 2020, with just over 22,000 units registered. It compliments Citroën’s intention to launch 11 new model derivatives over the next 16 months. 

“Covid has accelerated the need for transparaency and digital sales” said UK managing director Eurig Druce. To that end, Citroën is aiming to kerb the brand’s reputation for heavy discounting from list prices with a new ‘Fair Pricing’ scheme. 

Described as both “reducing list prices and being transparent and upfront with the customer”, the new business model will see list prices reduced across the board. The C1 city car, for example, is reduced by up to £700, with the C3 and C3 Aircross being reduced by £1175 and £1775 respectively. This comes into force from 1st December, but Druce claims cars sold before then will see prices brought into line with the new range. 

When speaking to Autocar prior to the announcement, Druce also acknowledged that repeat Citroën customers were used to the idea of haggling, while campaigns such as the ‘No VAT’ discounts of the early noughties mean the brand has a reputation to alter. 

However, he also said that the fair pricing scheme “improves the residual values of the cars do the cost to change a car could become even less than in the days of the big discounts”. 

“From a dealer point of view what they really need is throughput and volume, and to drive the we need to increase the level go transparency we can offer, improve the level of trust with the customers. It’s something that will help grow margin was in terms of overall volumes through the network”. 

As well as the new pricing strategy, Citroën has revised its range structure and trim levels on its most popular models. The current Touch, Feel and Flair trim names will be ditched, with ‘Live’ taking over as the base trim, and ‘Sense’ and ‘Shine’ models further up. Some models will also feature ‘Plus’ versions of the latter two trims. 

The French brand is also firing ahead with its recently launched Citroën Store and Virtual Showroom, which allow buyers to complete a full transaction on a new car online. To help promote this, a number of new ‘C-Series’ variants will be launched aimed specifically at online buyers. Offering more equipment and the new competitive price, they also feature a five-year extended warranty.

C-Series models start from £13,980 with the recently updated C3, rising to £17,000 and £25,755 respectively for the C3 Aircross and C5 Aircross SUVs. They’re available to order from next month with first deliveries due in 2021. 

Another strategy adopted to improve residual values is the substantial reduction of supply of new cars directly to rental companies. Druce claims that, as of August last year, more than 16% of Citroën’s sales mix went to rental fleets, which has been reduced to below 10% during this year. The plan will also “see the end to short-term, ‘fast churn’ business”. 

The problem with that type of business, Druce says, is that it “generates a nearly new vehicle back into the market in twelve months time”, often at a low price, causing over-saturation of the used market and impacting residuals. The firm claims that has already resulted in the new C4 and ë-C4 ranking among the best in its segment for residuals. 

Leave a Reply

Your email address will not be published. Required fields are marked *