PSA keeps the faith with Sime Darby

PSA Peugeot Citroen is happy to have placed all its eggs in the Sime Darby basket for distribution of both its brands in Australia, despite a 42 per cent plummet in local Peugeot sales volume since 2007.

Visiting Australia for the official handover of Citroen from Ateco Automotive to Sime Darby, PSA vice president of international operations Yves Moulin effectively admitted that PSA shares the blame for sagging Peugeot sales here.

“It is never – the same for Ateco – it is never only the responsibility of the distributor,” he told GoAuto.

“There is certainly a responsibility of the distributor but also a responsibility that depends on prices because of the market, it depends on the people we put in place to help them.

“At the end of the day to convince new customers you need to put more money into advertising, the retail prices, the staff, so at the end of the day it depends on the energy and the investment you make into the market.”

Mr Moulin said that PSA had decided to stay with an independent distributor in Australia rather than establishing a subsidiary because of this country’s distance from Europe and that Sime Darby “have the right people, the right experience for this market”.

Left: PSA vice president of international operations Yves Moulin.

More to the point, he said PSA would rather spend money on product development, new technology and reducing emissions.

Times are tight for the French conglomerate and its exposure to the slump in Europe’s new car market – resulting from the region’s sovereign debt crisis – led to the company reporting a €4.7 billion ($A6.2bn) writedown for 2012 and the announcement last year that it would slash up to 8000 jobs.

Australia is just one of a number of markets where PSA has merged traditionally separate Peugeot and Citroen distribution as part of an efficiency drive established in 2011.

Mr Moulin explained that some countries have subsidiary distribution for one brand and an independent importer for the other but saw numerous benefits to the independent importer model.

“For the importer it is his own money, it is in his interest to react more quickly,” he said.

“An importer who thinks for the long-term future will make the right investments and as a result very often we see that our importers are better than than our subsidiaries because they are quicker, they react more quickly, they are more simple and they are less complicated.”

Mr Moulin was also of the opinion that importers tend to be less afraid of being truthful with PSA over issues such as pricing and product compared with a subsidiary.

Sime Darby Group Australia managing director Rob Dommerson said the company is “in some ways is the best of both (independent distributor and subsidiary)”, and makes the most of its local knowledge.

“Clearly we are an independent importer but we don't act independently we have people on the ground that work with us linking back to PSA for both Peugeot and Citroen and we take guidance from those people... it is a great blend.”

Mr Moulin said Australia remains an important market for PSA but described this market as “not strategic” for the company.

“It will not change the face of PSA globally,” he said.

“I believe in the market, I believe in the economy and think that we should increase our market share here. I am sure we should be able to increase our market share but it will take time.”

Peugeot sold 8807 cars in 2007 but just 5071 last year, with year-on-year decreases of 17.6 per cent and 20.8 per cent in the GFC years of 2008 and 2009.

In 2010 the start of a turnaround was expected as sales dropped by just 1.7 per cent but registrations were down a further 7.6 per cent in 2011 and 2.9 per cent in 2012.

Under Ateco, Citroen sales have more than halved since 2007, when 3803 were registered, but Sime Darby expects to restore the brand to pre-GFC levels by 2015, with a 35 per cent increase forecast for this year alone.