Paul Barker grabs a cuppa and a chat with one of fleet’s most influential figures – Martin Gurney, fleet and used vehicle director, Citroen, DS and Peugeot
QThe best place to start is probably by summing up 2019 across your Citroen, DS and Peugeot brands?
It was a tough year, dominated by uncertainty over Brexit and obviously in times like that the market doesn’t get any easier, but from a Citroen, DS, Peugeot perspective it was pretty pleasing overall.
We had some challenges on the Peugeot side related to Boxer van supply, but more or less managed to balance that out with conquest business. Our relevant fleet sales on Peugeot were down a little bit more than the market but we kind of held our own. Standouts though, were Citroen and DS; we grew our Citroen relevant fleet sales by four and a half percent in a market down just under 4%. And that really is the effect of the C5 Aircross, which is great news. And there was an 80% relevant fleet growth for DS, which is staggering, but we are still establishing ourselves from a relatively low base.
ON THE MOVE TO MOBILITY
Peugeot is on the verge of launching a new rental programme through PSA’s Free2Move leasing arm.
Described as a dealer-based short-term rental product, it is designed to offer ‘mobility passes’ to customers that need a different type of vehicle on certain occasions. For example, a customer taking an electric vehicle, but requiring an internal-combustion-engined car for a few occasions or weeks per year. It also has a car-sharing app that could be applied to pool cars or company car fleets.
Fleet boss Martin Gurney admits that the first objective is to provide a retail customer with a rental option as part of the package, but he says, “once the network exists, the world is our oyster in terms of what packages we can provide to fleet customers”.
The pilot phase is due to be completed by this summer, with a wider roll-out scheduled for the second half of the year.
QLooking into 2020, obviously it’s quite a tricky one to plan for, but what would constitute a good year for you?
This year is the year of energy transition and the year where we will undoubtedly establish ourselves as a major player in electrified mobility. If you just think about what we’ve got already now and coming this year with e208 and e2008, DS3 Crossback E-Tense, the plug-in hybrids in 3008 and 508, DS7 Crossback E-Tense and Citroen C5 Aircross PHEV, and we’ve started deliveries on all with the exception of C5 Aircross PHEV that’s now open for order. And the timings are still to be officially announced, but we’ve got Expert and Dispatch electric coming later in the year.
But we’ve also got some new model launches at the heart of our business in the 208 and 2008. In terms of our goals, we talk about energy transition but we want to continue to deliver sustainable market share growth. We’ve talked a lot about our obsession with channel management and RV protection so that continues, but also now of course sustainable in terms of the environment.
QHow big a part will the electrified product play in volume terms? is it useful to have from a halo perspective or will there be a volume contribution?
From a corporate sales perspective, we anticipate that the battery electric vehicles and plug in hybrids will constitute just over 10% of our corporate sales.
Of course, there’s a fairly significant benefit for end users in terms of Benefit-in-Kind taxation as well. So, those new models are important, and important in the context of us wanting to change just over 10% of our sales, but I think we’ll have as much pull for that product as we’re going to have to push. Inevitably, consistency in terms of government support is critical and there’s still a degree of uncertainty in terms of what’s going to happen with plug-in vehicle grants and so on.
QIt would be expected to have a supply for launch but will there be a constant supply of electric product through the year or will delivery times be an issue?
No. We’ll be working with our fleet customers, either because they put their hand up or we’ve identified them as a target customer for our BEVs and PHEVs. One of our key actions through Q1 is taking a very proactive approach to sit down with each of those customers, help with the positioning of the car to understand where it’s going to sit on their choice list, and help them plan the in-fleet of those vehicles. Because while I’m absolutely confident in the full-year supply, what we clearly can’t do is deliver that full-year supply in January and February, it has to be phased across the year. We are already talking about supply through the year through to August and September to make sure that we can deliver in line with production.
Our approach remains to help our customers make the right choice of powertrain; our strategy of one model and the choice of a petrol, diesel or electrified powertrain underlines that. We do genuinely think that ICE engine vehicles are still going to remain the right choice for a significant majority of our customers. And for a low-CO2 manufacturer such as PSA, we’ve got to be in a great position.
The original DS brought to the world its stronger monocoque body design, revolutionary style, hydraulic-assisted steering, gear-selection and adjustable-suspension and is still the benchmark for ride comfort. Very forward thinking and avant-garde, traits that the all-new DS range has.
The second model to launch in Peugeot’s new generation of electric vehicles and, along with the petrol and diesel variants, fulfils our philosophy of ‘choose your Peugeot, then choose your powertrain’. It clearly stands out from the competition.
CITREON 19_19 CONCEPT
The most futuristic concept out there at the moment happens to be one of ours, and it really fires the imagination. Citroen 19_19 Concept represents the brand’s vision of ultra-comfort and extended range electric mobility. If the future looks like this, there’ll be no objections from me.
QWhat are the barriers to success from an electric vehicle point of view? Is it knowledge and understanding, the public charging infrastructure, or range anxiety?
Yes, yes and yes! It’s all about trying to make it as easy as possible, so we’ve established a partnership with Pod Point from the perspective of either home or workplace charging points. We’ve got that full service available to make it really straightforward and easy for someone to get a charging point put in. And we’ve got a partnership with Polar for the public charging network. But one of the big challenges we face in the UK, and we continue to lobby on this point, is that we clearly need a better-integrated public charging network with interoperability between the various providers. I’m sure that will come because I think the pressure to do something about it will soon become unbearable from the Government’s point of view. The other barriers to success include – clearly from a business customer’s perspective – longer-term visibility over grants and financial support, and long-term visibility over BiK taxation rates.
QApart from plug-in vehicles, is there an area of opportunity you’re not currently capitalising on; a product or an industry sector you feel is ripe for growth?
We still have a huge opportunity, and we have had for many years for the Citroen, DS and Peugeot brands, in terms of raising customer awareness of just how brilliant those products are. So, we continue to over-invest in long-term fleet demonstrations with the view that if you get someone sat in one of our latest vehicles, it can only help to improve their perception of the three brands. So that’s definitely a growth opportunity.
And we can do bit better in public sector. I think that our small cars have always been strong in public sector, C3 in particular, and new 208 will boost that enormously this year, plus of course there’ll be a significant demand in the public sector markets for battery electric small vehicles as well. And a bit of a wild card but with our strength and heritage in LCV, the conversion market is still a big opportunity for us. So Citroen Ready to Run continues to grow in strength; that’s having those tippers, dropsides and Lutons ready to go. And we unashamedly copy that for the Peugeot brand as well with the Built for Business programme. We’ve seen some great growth last year, and there’s lots of potential to continue to grow. So while our panel van sales will still obviously be a core part of what we do, the converter commercial market is really interesting for us. But clearly, the first half of the year is all about becoming a major player in the electrified market.
QAre you becoming more closely aligned with sister brand Vauxhall as the relationship develops?
Commercially, we’re still separate. Clearly, where it makes sense for us, and more importantly our customers, behind the scenes we’re looking for synergies and ways of working together and we do have some customers now that want to speak Citroen, DS, Peugeot and Vauxhall in one meeting, which we facilitate. But generally speaking, the group’s approach is, given its long and successful history in the UK, especially in the world of fleet, Vauxhall remains separate. Unless, it’s important to stress, we have a particular customer who wants to work differently. And I don’t see that changing in the foreseeable future.
QAre residual values where you want them to be across the board now?
We’ve had fantastic uplifts on new 208 and 2008 in particular. Every new model we launch now, whether it’s a Citroen, DS or Peugeot is in a completely different place from the old range. It is very difficult to change your position on a car that’s already established in the used vehicle market, which is why we’re making sure that with each new model launched, we maximise the opportunity to increase RVs. Obviously it’s great news for us but more importantly is great news for our customers from a whole-life-cost perspective. Myself and my team believe that trading responsibly to protect those RVs is something we owe to our customers as much as anything else. Because the last thing you want to do is invest in a product and find that we’re doing something that undermines that investment. And that’s a strategy that is absolutely prevalent across our businesses because we recognise this is one of the key pillars of success.
Electric vehicle supply
“I have zero concerns about the factories being able to produce the vehicles. And so far the feedback from the industrial teams is, as long as we give reasonable notice, they can gear up and produce more EVs if we need to, so there seems to be a pretty significant degree of flexibility in our battery production.”