Peugeot has its ‘best ever range of cars’

Peugeot’s fleet strategy is working because it has its “best ever range of cars”, fleet director Martin Gurney told Fleet News at Company Car in Action. 

Fleet News: What are your expectations for the rest of 2015?

Martin Gurney: The fleet market is unbelievably competitive and aggressive at the moment. Everyone has their view, my view is there is a lot of product coming into the UK, buoyed by a strong or preferable exchange rate for those manufacturers that import from the Eurozone. I don’t think the retail market has met with manufacturer expectations through the first half of the year and the product has to go somewhere and therefore we’re seeing the fleet market be pushed very strongly by oversupply to a degree.

I don’t think the fleet market, 11.5% up as it is at the end of May, is sustainable and we all have to think a bit more carefully about how we trade in the second half of the year.

Our strategy means that we’re not too affected by that. We’re not a company that is driven by market share aspirations, we’re driven by a strategy of channel mix improvement so what that means is focusing on the opportunities that are profitable and sustainable - corporate sales, leasing company business and increasing sales to SMEs via our dealer network. We’re migrating away from short-term rental and the sort of business that is not just less profitable but damaging from a residual value point of view. We think that is important for ourselves but, more importantly, for our customers who have vehicles that they purchase on a wholelife cost model.

From the point of view of our year to date performance in that context we’re really pleased. Our corporate sales – to 50-plus fleets – are up 16% and our Peugeot Contract Hire sales are up 43%. The only area where we’re slightly behind our plans is in leasing, we’ve grown our volumes by just under 10%, just behind the market. We want to take the opportunity for the second half of the year to review our approach to public sector with a view to moving that volume forward.

I don’t think the fleet market will continue at 11.5% up. I would like to think it would soften to half that level of growth, so 6 or 7%, with a hopefully slightly stronger retail market to bring a bit of balance back to the mix but it remains to be seen.

FN: Are you introducing, or have you recently introduced, any new initiatives for fleets?

MG: The whole of our reorganisation, the combination of Peugeot and Citroen, has been designed with our customers in mind.  There is a huge amount of best practice that exists within Peugeot and within the Citroen and DS world and our challenge at the moment is to grasp the best elements that exist within both of those and bring them together so we can offer a better service to our customers - whether that be at a personal relationship level or the systems we use to support our customers.

From a Peugeot point of view, we’ve established a strong business centre network of 60 committed investors out of a network of 220. The strategy we took in selecting the network was to have a view on geographically where we wanted our business centres but we also wanted to make sure we had willing partners.

The key for me is making sure we’ve got sound financial packages for our dealers to market. Part of the reason why our Peugeot Contract Hire sales are up 43% is because we’re now giving our dealers the finance products they need to promote our product to SMEs.

FN: What new fleet models have you launched/are you due to launch this year?

MG: The only reason why our current strategy can work is because it’s supported by fantastic product and our best ever range of cars. 

The big one at the moment is the 208 facelift, which has a lot of new spec. We’ve done a lot of work with CAP and KeeResources, explaining to them the longer term viability of our business model and that we’re not chasing market share at all costs and they’ve taken a very pleasing view of the residual values of the 208 and that just adds to our strength from a wholelife cost proposition.  

We’re getting a lot of interest, and starting to win some significant corporate opportunities, with 308 SW, whereas previously we’ve not quite had a product that stacked up there.

Towards the end of the year we have a 308 GTi by Peugeot Sport joining the range. Both the 250hp and 270hp versions have CO2 emissions of 139g/km.