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The granitekitchen Interview: Martin Gurney, PSA Group

Date: 08 September 2016   |   Author: Debbie Wood

A four-year recovery plan completed two years ahead of schedule has left the PSA Group on very firm footing in 2016 and looking towards future growth.

On the back of a corporate restructure that brought together the fleet sales teams of Citroen, DS and Peugeot 18 months ago, Martin Gurney, group fleet director, is ready to get the ball rolling on some big plans to grow the group's presence in fleet and become a market leader in a number of key areas.

Hybrid future

New products form an integral part of the firm's growth plans, and big news for 2016 will be the launch of the new Peugeot 3008 and 5008. The 3008 moves away from its previous MPV positioning and no longer competes directly with the Citroen Grand C4 Picasso, instead rivalling other popular SUVs like the Nissan Qashqai.

The new Citroen C3 will also be arriving at the beginning of 2017, a car that has previously failed to capture the attention of company car drivers. The all-new model is due to be unveiled to the public at the end of this month and Gurney is expecting to significantly grow the C3's sales in fleet next year.

"The C3 is quite an old car and we've found it hard to be competitive, [but] next year we are expecting to sell ten times more volume of C3 into fleet - it's a step change for Citroen in terms of the small car market," Gurney tells granitekitchen. "We are extremely sensitive about the residual values of our products these days but I'm convinced we will grow our sales tenfold with the new C3."

One of the surprise successes for the firm has been the Citroen C4 Cactus, particularly in fleet, where it makes 70% of its sales. Currently 79% up year on year in 2016, Gurney puts the success of the Cactus down to its Marmite looks: "The Cactus seems to have captured the imagination of the fleet market.

There was a deal of scepticism around the car's styling but it's been very well received, it's very popular with perk fleets and the public sector, and it has an amazing car park effect - once a few come onto a fleet we see an upsurge of orders."

Within the firm's growth plan is the further development of plug-in hybrid and electric car technology that will appear in the line-up from 2019.

There will be no standalone electric or hybrid car, like BMW's i3 or the Nissan Leaf; rather, PSA will be offering a choice of propulsion methods across existing model line-ups. Gurney hints that the 208 will be available as a full EV, as well as in petrol and diesel forms, when the new model is launched in a couple of years' time.  

"The market will decide. It's the choice of powertrains which will be key moving forwards," Gurney states. "While governments around the world are focused on emission results rather than an actual solution, it is absolutely essential to maintain a level of flexibility so we can offer what the customer wants."

Three very different brands

In the past, many would argue that there was a lot of crossover within the Peugeot and Citroen line-ups. However, varying life cycles and new model positioning has helped to minimise how much the brands compete.

Moving forwards, the group is aiming to position Peugeot as a more premium manufacturer, although Gurney admits user choosers still need to be convinced.  

"The challenge we have is in the perk car market where not enough people say they want a Peugeot over German rivals. It's not a unique challenge but we feel the 308 could convince more to consider it."

Of the three brands, it's Citroen that has arrived at where it needs to be, according to Gurney. Peugeot still needs to make progress in its products and price packaging, while DS has had a challenging start to its rebirth as a standalone brand, with sales predicted to finish 10% down year on year in 2016.

However, according to Gurney, what the figures don't show is the improvement in the mix of business and the uplift in residual values: "The launch of DS as a premium brand and the direction we want to take it means we've had to change our mix of business away from short-term types so we've got the foundation of strong residual values for the brand to build on - it's a shift more than starting something new."

Over the past 12 months in the premium supermini segment, three- and four-year RV forecasts for the DS 3 are up around 4% in a segment that has remained static.

"The success we are enjoying with DS this year is somewhat hidden in the overall figures, but we are really happy with the progress we are making," says Gurney. "Everyone recognises it'll take 30 years for us to get to where the brand needs to be."

One fleet team

Gurney moved to the role of fleet director at Peugeot in December 2013 and then the teams merged at the beginning of 2015, with Gurney taking on full fleet responsibility for all three brands.

It's a move that took five months to set up internally and has brought its fair share of challenges too, but overall Gurney says it's been welcomed by the firm's fleet customers.

"We spoke to our customers and explained what we wanted to achieve and sought their advice, in the spirit of us being more efficient and the customer being more efficient. It was a no-brainer and lots of our leasing company customers have said afterwards they don't know why we didn't do it sooner," he says.

One of the key challenges is making sure the three brands don't compete unnecessarily; however, what Gurney found when restructuring is that all the brands had differentiating databases with very little overlap - of the 1000 accounts transferred over, only 10% had requirements across the two brands.

Citroen and Peugeot corporate sales managers still remain as two distinct teams for existing clients as Gurney was keen not to disrupt the long-standing front-facing relationships the firm has spent years building with fleets. In time, Gurney is confident the company will move to a PSA sales manager structure, but only when the customers are ready for it.

Alongside the new cars and a more efficient merged corporate team, SME business is also at the very heart of the group's growth plans, and Gurney is looking to continue to improve the mix of genuine corporate-style business rather than tactical daily rental or short-cycle activity - a challenge, he says, that is made easier thanks to the sheer breadth of products available across the PSA line-up.

"I cannot honestly think of another fleet director in our industry here in the UK that has more products as suitable for the fleet market - so it's a great position to be in," he concludes.

Emissions scandal does diesel a disservice

The PSA Group set new standards for efficiency when it launched its range of BlueHDi diesel engines, in particular the 118hp 1.6-litre, which still leads its class in the 308 with a combined fuel economy from 91mpg and CO2 emissions as low as 82g/km.

These impressive figures are set to be improved even further next year when the engine is revised.
According to group fleet director Martin Gurney, the increasing pressure placed on manufacturers to reduce overall emissions challenges what is scientifically possible from a combustion engine, and implies that all carmakers will need to a have a hybridisation aspect in their line-up just to get close to those figures.

"We face a challenge, led by European government, which says that CO2 must reduce, and [they] have come up with figures which challenge the possible scientific value of what a combustion engine can produce, so it almost feels like that's where we've been led to go."

Gurney continues that the VW emissions scandal in Europe has done diesel a disservice and all the negative press doesn't highlight the advancements and progress made with the latest Euro6 engines.
"Diesel has probably been less affected here in the UK, but we still recognise that we need to promote it.

Against all the press and noise around diesel, getting those messages across about how clean our Euro6 diesels are is very difficult, and it's high on our agenda when we are meeting with fleet customers to talk about these positive messages," Gurney adds.

Until the launch of the firm's award-winning PureTech petrol engine, Peugeot was very dependent on diesel sales - the previous 308, for example, was around 95% diesel. The timely arrival of PureTech has been successful for both Peugeot and Citroen.

"While we continue to support diesel because we know our technology is fantastic and low-polluting, we have got an alternative for those fleets which are considering going down the petrol route. If you were to go back five years, we wouldn't have had that - so we are in a really strong position," Gurney says.

"You make your own luck and we were very fortuitous to have some excellent engineers who launched this engine at just the right time," he concludes.

See more:

PSA urges rivals to issue real-world economy data

PSA to launch pick-up truck as part of new five-year plan

PSA Peugeot Citroen calls for tougher emissions testing

Citroen and Peugeot sidestep Fiorino facelift for Euro6 Nemo and Bipper

Citroen drops C5 from UK range

 



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