Peugeot Citroën South Africa (PCSA) is here to stay, says new PCSA MD Francisco Gaie.
“The company forms part of VT Holdings’ long-term strategy in South Africa.”
Japanese auto group VT Holdings on June 1 signed a deal to acquire 51% of PCSA from the French Peugeot Citroën group (PSA).
PSA will retain 49% of the operations in South Africa.
Gaie replaces Francis Harnie, who returned to Europe.
Gaie sees the joint venture not as PSA partially pulling out of South Africa, but rather as a strong Japanese dealer group investing further in the country.
VT Holdings entered South Africa in 2008. It owns three Suzuki dealerships, one Fiat Alfa dealership and two Peugeot dealerships.
The 33-year-old Gaie hails from Pretoria. After spending some time in the British police force, he studied economics at the universities of Pretoria and Stellenbosch, and then entered the automotive industry.
Prior to his appointment at PCSA, he was the COO, overseeing retail operations at VT Holdings’ Trust Auto Group.
PCSA sales in South Africa have tumbled in recent years on the back of numerous challenges, including a weak rand that eroded vehicle importer margins.
PCSA announced in 2016 that it would no longer import Citroën vehicles into South Africa.
In 2015, Peugeot-only sales in South Africa reached 1 448 units, declining to 1 094 units in 2016. Sales for the five months to the end of May reached 260 units, or roughly 50 units a month.
Gaie aims to grow sales to 1 500 units for the financial year ending March 2018.
“This will give us a foundation to get back to 500, 600 units a month.
“More important than volumes, however, is to ensure that our dealers are profitable.”
PCSA has 25 dealers, and will not grow beyond 30, notes Gaie.
Citroën Not out of SA
Gaie says Citroën has not left South Africa.
“It would be more true to say that we have decided not to import any product for the next four to five years, as there is nothing in the Citroën model line-up that would have a competitive edge in the South African market.”
He adds that PCSA is realistic about the French brand’s presence in South Africa.
“We need to rebuild the brand, and focusing on two brands would be difficult. Financially, it would also not make sense to do so.”
Gaie says PCSA’s immediate focus is on the dealership network – more specifically on improving the quality of service to Peugeot and Citroën owners.
“We have certain minimum standards that we are busy implementing at our dealerships.”
PCSA’s second focus is on the product line-up available in South Africa.
“As we are an importer now, we can determine the models we want to import; nobody can tell us what models to launch in South Africa.”
A third focus is on marketing.
“Consumers must understand that PCSA is in South Africa to stay,” emphasises Gaie.
“We also have to deal with the perception that Peugeot parts are expensive and often hard to come by.
“To counter this, we have a parts warehouse with R35-million of stock near OR Tambo International Airport. “We are also looking at providing out-of-warranty vehicles with non-genuine, but PSA-approved parts.”
Gaie says the Peugeot brand will be pitched in the local market as providing “premium, value-for-money” vehicles.
New models set to enter the local market in the next 12 months include the refreshed 208 hatchback, the 2008 sports utility vehicle (SUV), with the 3008 SUV to follow in August.
The new 308 larger hatchback is also on its way, as well as the 5008 large SUV and the Traveller minibus.
By 2021, Peugeot also plans to bring a one-ton pick-up to the market, with PCSA “very interested” in also launching this product in South Africa, says Gaie.
Peugeot in France may be in the process of purchasing German carmaker Opel from General Motors, but PCSA will not be responsible for Opel’s distribution in South Africa.
As from January 1, 2018, Opel will be distributed by the Williams Hunt group in South Africa.