Company Car Today

Citroen has cut its prices, revamped its model line-ups and pledged to cut daily rental and short-cycle leasing volumes as it seeks significant improvements to its residual values.

Long Term Test - Citroen C3 Aircross - Fourth Report - 17th April 2019 - Main image - Automatic full-beam headlights don't seem to dip quick enough to stop dazzling on-coming trafficIn a move named Fair Pricing, Citroen is cutting list prices to more closely represent transaction prices, with moves including a drop of up to £1,775 on the price of a C3 Aircross  (pictured) and £1,175 on the price of a C3 hatchback.

The moves to make long-term improvements to residual values include limiting daily rental to a maximum of 10% of the company’s business, compared with the 16% it was in August 2019, and limiting the number of vehicles hitting the used market at less than a year old.

“We’ve put rules into the business that means we have to abide by this and it effectively makes it a disciplinary matter if we don’t,” Citroen UK managing director Eurig Druce told Company Car Today. “And in the same way, sub-12-month business now requires my approval for it to actually happen, which is a clear view it’s not going to be standard trading practice for us as a brand to have short-term high-churn vehicles in the marketplace.”

Druce admitted that prior experience of the industry being told by different manufacturers that it would be making similar moves to improve RV, but then not following through for the long turn, may have made residual value providers sceptical. “Many have said that before and not delivered it, so I’m very realistic to know that they need to see the evidence; they’ve started to see the evidence and will continue to see the evidence next year,” he continued. “I can accept that with certain products in certain instances we might need to wait 12 or 18 months to see improvements in residual value, but if you look at C5 Aircross and new C4 [launching late this year], you’re already seeing the benefits of that trading pattern in terms of the residual value.”

Citroen is also changing the naming structure of its line-up to signpost the change in pricing structure, going from the current Touch, Feel and Flair to a new hierarchy of Live, Sense and Shine. The changeover to the new trims will happen with model year changes from the beginning of December, with pricing of pre-change cars adjusted from now to represent as closely as possible the new trims and prices.

Citroen has also added a digital purchase journey that will initially offer a five-year warranty on the C3 C-Series bought through the Online Store. Though there will be a way for dealers to match that for retail customers, Druce confirmed that as a retail offer, fleet customers won’t be offered an extension of the standard three-year warranty. But he said the brand would monitor customer reaction, and  if customers respond well, a five-year warranty could become “a more intrinsic part of the range for all products”.

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