Peugeot Takes Aim At German Vehicle Fleet Market

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SAINT-DENIS, France (Dow Jones)--With demand for private cars in Germany expected to slump this year, French automaker PSA Peugeot-Citroen (UG.FR) is planning to surf on the expected growth of sales of light commercial vehicles, a senior executive said Friday.

"People are saying the German car market this year could be half the size it was in 2009," Jean-Marc Gales, head of the Peugeot and Citroen brands, told Dow Jones Newswires in an interview.

"But the fleet market is expected to grow by 20%, so we have started a business-to-business offensive" to try to gain market share in a segment that offers fatter margins than sales of cars to individual buyers, he said.

Sales of light vans are also moving up again in France, pulled up by reviving business activity, he said.

Germany's car market surged by more than 20% in 2009 to 3.8 million vehicles, boosted by government incentives for consumers to scrap their old cars and buy new ones.

These cash bonuses were phased out last autumn, however, and automotive forecasting consultants J.D. Power say the German market is likely to fall by more than 1 million units in 2010.

Gales was speaking on the sidelines of an event to revamp Peugeot's brand image with a new visual identity. Gales also set out his five-year plan to attract new, younger customers by bringing out models with more dramatic styling than the middle-of-the-road designs currently in its product catalog.

Peugeot plans to launch 14 new models between 2010 and 2012, Gales said, and aims to move up three notches from its current 10th place among the world's leading brands.

The sales offensive kicks off in the spring with the launch of the Peugeot RCZ, a sporty 2+2 coupe aimed at more well-heeled customers looking for distinctive styling. Gales said he expects annual sales of around 20,000 RCZs, a far cry from the hundreds of thousands of sales of Peugeot's mainstream models.

"For that type of car, it's not bad volume," he said. "But what's important is that the cars are seen in the street. The effect is immediate" and enhances the image of the brand.

Peugeot also showed off the SR1 concept car, a modern slinky hybrid roadster that Gales says presages the future styling of the brand. Peugeot is taking the brand in other directions, too.

It showed off a three-wheel scooter, an electric bicycle and its BB1 concept, a four-seat full-electric bubble car that Peugeot has decided to manufacture in a slightly different form.

WSJ