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FULL ARTICLE | EDITORIAL 
Fast rising Crossover tide lifts even the leakiest boats
Peter Schmidt | Editor

Published: Wed, 06th April 2016 14:16:15 GMT
 

Taveres PSA France Push to Pass 2016


Open quote signWhat a difference a holiday makes. Unlike last year, this year’s Easter holiday was in March. This simply couldn’t fail but impact on the number of cars sold during the month. According to the latest statistics released by Germany’s KBA, year-on-year sales this March remained stuck at last year’s level. Other than that, there was one fewer working day in the month than in March last year.

Expectedly, the Easter holiday impact also left its mark on Germany’s car production, exports and order intake. And yet, testament to the stored up heat, German March sales of SUV-Crossovers continued their ceaseless climb. 

Whereas Germany’s March sales of fuel-economical superminis fell 13.1 per cent, sales of SUV-Crossover rose by a trendbucking 18.2 per cent. 

Testament to true underlying demand - despite the Easter handicap - March car sales in Western Europe still rose more than 5 per cent.

Drawing attention to underlying SUV-Crossover demand, not just in Germany, but across the entire West European region, the rocketing sales share attributable to these trendy vehicles is almost unparalleled. 

In just half a dozen years, the sales share going to SUV-Crossovers rose almost threefold. 

That’s a pole-vault jump from 9 per cent in 2009 to 15 per cent in 2012. 

Raising the bar a great deal higher, by close of last year their sales share reached 23 per cent. 

A gain of 14 percentage points of market share in just six years. 

Moreover, during the opening two months of this year the SUV-Crossover share soared to 26 per cent.

A fast rising tide lifts even the leakiest boats. 

French carmakers, PSA, knowing full well that in past crises it wasn’t so much extra effort but trendy new products that got them going, clearly hasn’t forgotten the past. 

Lessons learned, PSA developed and launched not just one, but an entire range of fashionable Crossovers. 

And it shows. 

Last year, Peugeot alone sold nearly quarter-of-a-million Crossovers in Western Europe. 

Overnight, Peugeot’s and Renault’s Crossover sales rally changed the make-up of their domestic French market.

Last year, SUV-Crossovers captured a striking 26.1 per cent of their domestic French car market. 

This compares to a sector share of 20.9 per cent in 2014. 

Underlining their slam-bang pace of advance, in just two year’s France’s SUV-Crossover share sky-rocketed from 16.3 per cent in 2013 to last year’s 26.1 per cent. 

That’s a gain of close on 10 percentage points in just two short years. 

Moreover, in the three months to March this year France’s Crossover share ballooned to 27 per cent. 

Significant for the bottom line, these vehicles are among the autoindustry’s most profitable products.

Not so long ago, while close to drowning in a sea of red ink, whispers that Peugeot-Citroen was about to go bust could be heard in autoindustry circles. 

Thanks to a handy financial lifeline tossed its way by China’s Dongfeng and the French government, Peugeot Citroen pole-vaulted out of the morass. 

Last year, under the capable leadership of its youthful Carlos Tavares, PSA posted a near €2bn operating profit, resulting in a 3.6 per cent operating margin. 

Blip or sustainable turnaround?

Yesterday, part of its suitably named “Push to Pass” strategy, PSA gave notice of its intention to reach an average 4 per cent recurring automotive operating margin between 2016-2018, rising to a targeted 6 per cent by 2021. 

That’s accompanied by a product blitz. 

Chiefly 26 new cars and 8 light commercial vehicles. 

PSA’s imminent avalanche of new products, as is the case with most rivals, is likely driven by a host of profitable new Crossovers. 

After acting at breakneck pace on all too blatant product opportunities, PSA seems set to emerge from the ashes as the most ferocious competitor to date
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