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Insight Peugeot UKn light of Renault UK's ongoing reorganisation, Tim Zimmerman was quick to point out that Peugeot UK has no plans for a radical reorganisation or reduction of its franchised dealer network. It re-shaped its network from 2007 when it shrank from 310 sales points to 240, well ahead of his arrival last September. Now it wants to retain a stable network of 'Blue Boxes' focused on putting customers first.This year will be exciting for Peugeot's network due to product launches, most importantly the arrival in June New products spearhead Peugeot's sales driveFrench carmaker is quick to dispel any suggestions that it will follow Renault and reduce the size of its network or model range. Tim Rose reportsIof the 208, but also the addition of diesel hybrid power­train into the 3008 and 508 range. The B-segment is Peugeot's biggest market, so 208 will be a huge oppor­tunity for the network. Zimmerman said the quality and packaging of the new car means dealers will be able to conquest customers from other brands. Despite the economic conditions, Peugeot is optimistic. The carmaker's aim is for a 5.7% share of the total new car market this year - a 0.8 percentage point improvement on 2011, about an extra 15,000 sales.Peugeot's 'just add fuel' inclusive package has been successful in bringing new customers, and accounts for 11% of retail sales. Many of these customers are younger than the brand's typical 50-year-old average. A package will be applied to 208 from launch, and sales director Neil Moscrop expects its success to bring down the average customer age. He also expects a high proportion of mid and high-specification model sales.Such higher margin sales will be welcome, as Zimmerman admitted profitability is "not good enough" and it remains difficult for dealers to make money. The network average is "about breakeven", he said, although the norm for established sites is 1% return on sales. Top performers are achieving 1.5%."We're working to make it better," he said. Peugeot has worked with the dealer council on cost reductions, such as optimising demonstrators, centralising new car stocks, freezing training charges and reducing the cost of marketing programmes. The goodwill budget for out-of-warranty repairs has been delegated to the network's control, to help with customer retention.Nevertheless, Zimmerman added: "Reducing dealers' costs is not enough, the dealer has to be good at every line of the business too. Compare the first quartile's performance with the third's and you see the first is better at everything."Tim Zimmerman

New car marketNewsDealerprofileUsed caranalysisInsight:RecruitmentPeugeot UKNewsdigestNew car newsWhich is why, he said, Peugeot is also building focus on the underlying profitability of the network through aftersales retention and new customer conquest.Last year the carmaker started doing 'prospect satis-faction research'. Customers who didn't buy are contacted within seven days to find out about their expe-rience. Dealers are given feedback a day later, and the research analysis is leading to process and skills improvements. Peugeot's field team is working with dealers to see if some of the prospects can be rescued. Test-drive ratios are strong - spontaneous offer of test-drive is at 96% - which Peugeot sees as vital in converting consumers to its new models. An online demonstrator booking system has increased efficiency, and Zimmerman said the momentum must be main-tained. Much emphasis is on the skills of test-drive conversion and product presentation to ensure the features and technology are properly explained and consumer's buying signals are identified.Zimmerman is continuing to reduce Peugeot's pres-ence in the short-cycle fleet and national daily rental sector. It's a sector which helps get cars experienced by consumers and generates nearly new cars for retailers, but overdependence poses a risk for the retail business and residual values, he said. In 2011 around 8,000 fewer units went into that sector.However, he believes true fleet and business is an area to make money from. Most dealers recognise there's an opportunity in selling to businesses, he said, and it's up to them how aggressively they deal with it. Motability will remain an important sales channel too.For aftersales retention, Peugeot is testing a fixed price service offer for cars aged three to seven - an area where retention is weak - and encourages the sale of monthly-paid service plans, but won't support free ones.Peugeot has a goal to be compared with Volkswagen by 2020 in terms of quality and customer experience. Its ongoing challenge is to lift the awareness of its brand and product potential. Marketing director Morgan Lecoupeur said Peugeot's strategy of 'premiumisation' is linked to marketing focused on demonstrating the raised quality and premium features of its cars while promoting them as fun and desirable. Advertising began in March centred on halo models such as RCZ and 3008 and Peugeot's technological advances such as the diesel hybrid, and a pre-launch campaign for 208, which uses a tagline of 'let your body drive', includes an interactive website and data gathering exercises. The premiumisation also applies to how Peugeot interacts with its retail network and the car markets, and how the network interacts with customers. Communication has improved, offers are clearer and more consistent, and benefits are being seen in CSI scores and in car resale values, said Zimmerman. Carmaker looks to raise the stakesPeugeot 208Morgan Lecoupeur