Peugeot Following Renault By Increasing Profit Margins

Yesterday we reported on RenaultRenaultFrance, 1898 > present189 models
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Chief Operating Officer Carlos Tavares counter intuitive plan to reduce production and increase prices to save the company. It appears that PeugeotPeugeotFrance, 1882 > present120 models
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Managing Director Maxime Picat is following the same line of thought and is driving Peugeot upmarket. While this initiative is still young, it appears to be working. Peugeot is already reporting higher sales margins on the 208Peugeot 208 Gen.1France, 2012 > present103 versions
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than the previous generation. The company hopes that it will stem its €5 billion loss in 2012. 

Picat took over as Peugeot CEO in October with the goal of turning the company around. The 208 and upcoming 2008Peugeot 2008 Gen.1France, 2012 > present58 versions
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are the first cars that Peugeot will try moving upmarket. The 208 has already been a sales success as PSA's top-selling model and the fourth best selling car in Europe. 

"Just 15 percent of sales for the 208 are entry-level models while 35 percent are our highest trim lines," said Picat.

The 2008 will be marketed from the outset as an affordable, upmarket car. Its goal is to make Peugeot be perceived to have improved quality than previous generations. 

Assuming the 2008 marketing is a success, all future Peugeots will be similarly upmarket, but not so expensive to eat into Citroën DS sales, which will be aimed at premium buyers.  

The overall PSA plan is for Citroën's C range of cars, like the C3Citroën C3 Gen.2France, 2009 > 2016111 versions
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, operate in the low-priced end; Peugeot will be for medium-priced cars, and the DS cars will be for premium buyers.

"The idea is to address different customers. We are looking at the customer expectations ... to limit or reduce the overlapping between the brands," said Citroën's CEO Frederic Banzet.

Source: Automotive News Europe