Measured sales rebuild for Citroen

Citroen's climb back up the sales ladder is proving a significant challenge for the local distributor, Sime Darby.

But John Startari, General Manager for the Citroen brand in Australia, remains confident that the business can grow consistently and sustainably. Expansion in the immediate future will be contingent on one particular new product, the C4 Cactus, a small crossover SUV (pictured) due here in the first quarter of next year.

"We've got to start attracting new buyers, and Cactus is certainly very different; it's for individualists," Startari told motoring.com.au during the launch of the upgraded C4 hatch last week.

"And I think that demographic is growing; [it consists of] people who want to stand out from the crowd and [buy] something a little bit different."

Sime Darby has dropped the C3 light hatch and the C4 AirCross from Citroen's local range, leaving plenty of room for the C4 Cactus to regain those buyers, and more. In the case of the Mitsubishi ASX-based C4 AirCross, sales were inexplicably low, when much the same car wearing a Peugeot badge – the 4008 – is a strong seller for that brand, which is also distributed locally by Sime Darby. It perhaps points to traditional Citroen buyers wanting cars with traditional Citroen design and engineering traits – and the C4 AirCross failed that test.

As for the C3, it simply wasn't the right model for the direction Sime Darby wanted to take the Citroen brand in Australia. There wasn't enough profit in the entry-level variants, nor enough sales of the high-end cars.

"C3? We just didn't find that it was a viable product for this market," Startari explained. "If you look at our cars in the [high specification] Exclusive grade, they represented exceptional value for money.

"The problem we had; we were drowned out by people promoting their level-one cars that had very little specification. In terms of sticker price, you're comparing cars that were starting at $15,990 to something that was 25, but when you compare pound for pound and spec for spec, it was exceptional value for money.

"It was just too difficult to keep pushing that car... We could have spent a lot of money, to gain very little."

For the two full years since Citroen's parent company PSA transferred the local distributorship to Sime Darby from Ateco, sales have not matched the earlier distributor's annual tally over the previous decade. At its peak, Citroen sales in 2007 reached 3803 with Ateco handling distribution and marketing. Sales dived off a cliff from 2008, around the time of the GFC.

While Startari won't discuss sales projections for Citroen in Australia, he did point out that the brand is recovering. In 2014 Citroen sales (1307 for the year) were 10.8 per cent up over the year before, just 1180 cars sold in 2013. For 2015 so far, VFACTS figures reveal the 750 cars sold represent a 5.6 per cent gain on the same period last year.

"We don't disclose our internal targets," he said. "I personally believe they're irrelevant. There are so many external factors that can influence [the outcome], you need to be nimble enough to be able to react – and that's what we pride ourselves on, the ability to move with or before the market... to capitalise on opportunities."

In a sign of the distributor's optimism, two new Citroen dealers have opened their doors in Victoria, one in the Melbourne suburb of Richmond and the other in Geelong. Sime Darby's plans for the future of the Citroen dealer network will be reactive, not proactive. New dealers will only be appointed as national sales improve.

"We have mapped out the country, in terms of potential postcodes and market opportunity," Startari said. "We will not put dealers in those regions... until there's a viable business case that's driven by [sales] volume and margin, obviously.

"We're not going to go out tomorrow and put on 50 dealers and think that we're going to grow our market share. That's not the case, because very soon we'd realise that a lot of those dealers we'd put on are not going to be viable."

Startari was a little cagey about the strategy for the Citroen dealer network in Australia, but he insists there is one. Asked what makes the ideal Citroen dealer in Australia, he cited Continental Cars in the Sydney suburb of Roselands. Contrary to expectations of Citroen dealers, it's not part of a multi-franchise dealer group.

"We have an example in Roselands – a stand-alone Citroen dealer that is purely dedicated to the brand. But in a lot of cases that's not financially viable," Startari said.

What makes Continental Cars a particular success story for Citroen and Sime Darby is not that it's a triumph of targeted location to serve several neighbouring suburbs peopled by Citroen enthusiasts.

"I think it's got more to do with the heritage," Startari said. "It's a second generation of family [ownership]. The parents of the current operators were very heavily involved in Citroen. There is talk that at one stage they were a quasi-importer."

Most dealers can't boast a heritage dating back to 1958 however. For them, it's more a matter of conventional sales and marketing slog to keep the doors open to customers – and perhaps the support of a volume-selling Japanese or Korean brand in an adjacent sales premises.