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[Analysis] Why is Citroën in difficulty?

The Citroën C4 seen from the rear with a two-tone roof and its unique attitude on the market

The sales figures published for the month of May are cause for concern since Citroën ranks fifth in sales in France but, above all, it is permanently behind Dacia, which is well ahead of it. The figures in Europe also confirm a downward trend in the market, which itself is showing a significant increase. Where is Citroën really at and what are its difficulties but also its positive points? Analysis

With a market share of 6.8%, Citroën pales in comparison to France, which in the past was well over 10%. The reasons for these slumps are multiple:

- Logistic concerns are real with cars registered since December 2022 but not yet delivered. Cars ordered for months but not delivered or even cars delivered but in another dealership and in another city... All of this has a negative impact on the image and does not encourage dealerships or agents to sell cars. , in addition, face a breakdown of distribution contracts and difficult discussions with the group.

- The C4, C4 X and C5 X are still largely unknown despite having been out for a long time now. Also, although they are very correctly finished and well assembled, the quality of the plastics of the latest Citroëns is lower than the competition even though their prices are not necessarily so. Likewise, their style is perhaps too original or too "we did Citroën" without concretely bringing this little extra thing that we found before without having, however, an overflowing originality.

- Brand communication is also surprising. The €99/month C3 offer did not give rise to any external communication so that no media can relay the information even though this offer is quite unique. The same is true for many information such as the C5 Aircross on which the brand does not communicate even though it is the best-selling plug-in hybrid vehicle in France since January 1... In another era, Citroën would have made tons.

- The brand also made strategic mistakes in terms of products. While it can't get rid of the low-cost rumor, Citroën presented oli which, for a real Citroën as it is, is a little difficult to understand as it contains so many new features. How many articles have been titled "Citroën presents a cardboard car!", difficult then to say that the brand will not be low-cost!!!! It would perhaps have been better to present a show car of the future C3, faithful to 80%, which would concretely indicate what we would find on the street and with a certain idea of price, the oli concept, meanwhile, would have given a longer-term view. This show car would thus have very concretely indicated the route that Citroën was taking in the 12-18 months while clearly showing that it was not low-cost...

- Finally, during the supply difficulties, the Stellantis group favored, like many manufacturers, brands with high margins to the detriment of volume. Thus, if a Peugeot or a DS margins more than a Citroën, then it was prioritized which is a double penalty somewhere. You can't tell Citroën to be accessible, but don't favor it because the margins are low...

Alongside this bad news that may have weakened Citroën, there are however good positive signals that are unfortunately unknown and which nevertheless deserve to be more strongly.

- Thus, the PC+LCV market share in France over the first five months of 2023 is 7.7%, it was 9.6% in the same period in 2018. That of Peugeot is 15.5% in France in 2023 while it was 18.2% in 2018, Citroën's sales are falling, but ultimately not much more sharply than those of Peugeot and, in any case, Citroën is not the only one to fall

- The C4 is holding up very well in Europe with 5,270 units sold in April when Peugeot sold 7,543 units of its 308, sedan and station wagon included. Thus, C4 sales were up 6% when those of the 308 were down 1%. Similarly, compared to 2017, the C4 is doing better than the older generation, while the Peugeot 308 has half the sales (14,537 Peugeot 308s sold in April 2017, 2,796 Citroën C4). The C4 is ahead of the Opel Astra and the Mégane e-tech or thermal, only the two associated pass it.

- The action plans implemented by the new team in France are producing positive effects and should therefore impact sales within a few months. Thus, Citroën's order intake in May was higher than that of Stellantis' generalist brands, the brand increasing its market share in order intake which, inevitably, will be reflected in subsequent registrations

- Similarly, everywhere in Europe, Citroën is showing itself to be much more combative with everywhere price reductions, exceptional offers which, without a doubt, will have a positive impact in the coming months.

- Echoes of the future range are extremely positive with vehicles that will perhaps be less "original to be original" but which will bring a real proposition to the market. As such, the future C3, like the future C3 Aircross, has generated a lot of enthusiasm for those who have seen them and will bring real strength to Citroën. The C3 in particular is very relevant to customer expectations and will be quite unique on the market, just like the C3 Aircross.

- Citroën is a spearhead brand for Stellantis because the group relies heavily on it to develop outside Europe. It is proof of confidence and of a secure future for Citroën, which is in charge of conquering new territories to become stronger and bigger while ensuring sustainable growth, if the group wanted to kill it, it would not would not have chosen him for this mission.

In conclusion, of course the sales figures are cruel and seeing Citroën decline is never pleasant. Similarly, if there are many news outside Europe, they are quite thin inside even if in recent months the brand has made regular announcements and has greatly developed its range with new versions, engines or equipment in particular. on C4. Certainly, the negative points are important and quite worrying but the reasons to hope for a clear rebound are real and just as strong, the presentation of future models and in particular the future C3 should bring a boost to the brand. If the current sales figures are bad, there is therefore much to rebound and, above all, to realize that the sky is not as dark as we believe, especially since, for Stellantis, the margin matters. more than volume so if Citroën is profitable, which it is, its future is assured.

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