Strategy: Citroen’s DS premium brand targets cities, not countries
On June 1, PSAPeugeot Citroen appointed the first ever CEO for the premium DS brand: Yves Bonnefont, PSA's former director of group strategy. DS is already a stand-alone brand in China and set to become the same in Europe as well, tasking Bonnefont with elevating it from a tiny-but-successful division of Citroen to a global powerhouse, while further boosting profitability. An interview of Bonnefont by Automotive News Europe provides a few fascinating facts about the global strategy for DS. Extracts below.
At the moment, DS's only European stand-alone dealership is the DS World in Paris, and it is set to remain this way. There are 3 formats for the DS line at Citroen dealerships in Europe. First the DS Zone, just a black floor with some special lighting (85% of current European dealerships). Then the DS Salon, with 3 or 4 models displayed on a dedicated floor space, a DS salesman and DS signs outside the dealership. Finally the DS Store with dedicated entrances and a wall separating DS and Citroen models. DS's # 1 objective in Europe is to develop the 2nd level, DS Salons, as Bonnefont believes they offer a good DS experience and can be rolled out relatively quickly. There are currently 12 DS Salons in Europe but there will be 40 by the end of 2014.
Interestingly, Bonnefont is not looking at the world by countries but by cities. He says: "We have found that a lot of the growth in the premium market is happening in a relatively limited number of cities around the world: there are about 500 cities in Asia, Latin America, Europe and the United States that will account for the vast majority of growth in the premium market. Our strategy is to develop a first wave of dedicated DS dealerships in 200 of those cities to drastically increase the visibility of DS."
Which begs the question of launching the DS brand in the United States. Bonnefont declares: "We have no plans currently to go into the US, but it is difficult to be a premium brand without being present in that market. It would be crazy to say no forever to the US."
In terms of world distribution of DS sales, the brand sold 120,000 units in 2013, more than 85% of it in Europe. DS's target is to sell 50% outside of Europe by 2016. Another interesting piece of information is the fact that 62% of current DS sales are conquest sales (coming from outside Citroen) and about 85% of them choose between buying a DS or a model from another premium brand. These are previously mainstream car customers who want to buy a premium car. The main competitors are the top German brands and certain Italian premium brands like Alfa Romeo.