Looking for scapegoats will only get Citroen so far

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Looking for scapegoats will only get Citroen so far

On Tuesday, French auto brand Citroen released its DS5, the crossover vehicle which is known as being the official car of French President Francois Hollande.

But at the launching ceremony, the spotlight wasn’t really on the car or Gregoire Olivier, Asian operations chief of PSA Peugeot Citroen Group, who was visiting Korea for the first time.

The highlight of the launching ceremony was the aggressive remarks from Hanbul Motors CEO Song Seung-chul, a veteran in the industry for imported cars who has over 25 years’ experience.

While explaining his business plans for the DS5, he blamed local units of German automakers for ruining the imported car market, claiming they run businesses “like convenience stores” and they are just “stooges” of headquarters.

The issue started with a question from one reporter who was skeptical about Citroen’s sales goal and also the marketing ability of Hanbul Motors, the official importer of Peugeot and Citroen brand models in Korea.

Hanbul Motors, founded in 2002, has been going through a workout program since 2009 due to financial trouble. While the imported auto market grew 24 percent on-year, Peugeot and Citroen marked poor sales last year, heaping more pressure on the company.

Peugeot was the only European auto brand that saw a decline in its sales last year after selling 2,407 units. Its market share dropped 2.51 percent to 1.84 percent. Citroen, which was launched in April, was also able to sell only 255 units, far below its sales target of 1,500 units.

Despite the poor performance, Olivier said ties between Peugeot and Citroen, on one side, and Hanbul Motors, on the other, resemble those of a married couple. He added that there is no plan to deprive Hanbul Motors of its importing and distribution rights, much to the relief to the company’s executives.

Meanwhile, Song, 57, said the biggest problem facing the company is external as competition among imported cars is focusing on volume rather than quality.

According to Song, companies like BMW Korea or Mercedes-Benz Korea are merely trying to meet volume sales targets set by headquarters, even if the sales conditions are not favorable to dealers.

“If car sales don’t go as they hope, they transfer the dealership right to another shop right next door,” he said. “They’re like convenience stores.”

Because dealers face increasing pressure to hit their targets, more customers complain of feeling like they’ve been ripped off as discount rates change by the day, Song claimed.

“We [Hanbul Motors] are not ‘stooges’ like other local imported car units, as we don’t just follow orders from headquarters,” Song said. “These affiliates have no right to talk about customer satisfaction.”

Song’s comment reflects the behind-the-scenes reality of growth in the imported car market, which is still characterized by high prices and, in some cases, inadequate customer service.

Analysts say that before pointing figures elsewhere, Hanbul Motors and Peugeot-Citroen should first look at their own operations to determine why consumers aren’t opting for their models. If they really offer competitive edges in terms of quality and service, more local consumers would want to buy their models. But statistics show their sales have been declining.

Do Koreans lack a proper understanding of French luxury or chic? Or are Citroens just not good enough to attract them?

Either way, brand awareness remains a problem as many Koreans are still not familiar with the brand. Even Olivier admitted that people under 35 are more likely to think of a Nintendo DS than a Citroen DS.

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