Peugeot South Africa: Go big, or go home.


Peugeot 404 © by .Robert.

Peugeot South Africa has announced its intention to grow its sales in South Africa by 40%. The number sounds high, but the brand, like its sibling Citroen, battles to sell even 200 cars a month and therefore has a very low base to start with.

When Peugeot re-entered the local market ten years ago, it was a hit with consumers who bought the funky French cars in droves. Many had fond memories of legendary Peugeot models like the 404 which had become a symbol of reliability for the brand and it appeared to pick up where it had left off twenty odd years ago when it dis-invested from South Africa.

However, the honeymoon soon ended and South Africans started to experience the teething problems that most new brands inevitably suffer from. Parts availability was poor and pricing was perceived to be very expensive. The dealer network was not able to cope with the increasing car parc and it became standard for customers to have to wait up to a month to book their cars in for a service.

But the biggest problem for Peugeot South Africa was its suicidal arrogance towards customers. Having worked for a Peugeot dealership, I can attest to the frustrations customers experienced at Peugeot’s apparent disinterest in resolving customer’s technical complaints, rather looking for ways to pin the issues on the customers themselves. Even if the problems fell under the gambit of warranty, Peugeot would diligently find ways to turn down claims. Blatant product problems were swept under the carpet and vehemently denied by the folk at head office despite a plethora of literature detailing such problems on the internet.

The initial boom in sales subsided at an alarming rate to its current damp squid effort of less than 200 units per month in a 40 000 unit a month market. Clearly not an ideal situation and it comes as a surprise that after years of dismal sales, Peugeot have only now reacted by announcing a new full maintenance plan of 5 years or 100 000 km offering on their cars. Maintenance plans are a key standard feature on most vehicles retailed in South Africa, so Peugeot will have to with respect do more to lure back customers.

It appears they have already made a fundamental mistake with the launch of their maintenance plan with company MD Francis Harnie stating to the press that Peugeot owners will not have to open their wallets for five years with their Peugeot’s, save for petrol and tyres. Anyone who knows anything about maintenance plans will know that they ALL have exclusions attached, especially as the vehicle ages. Items like trim soon fall outside the maintenance plan and in any event, no plan offers an open cheque book especially with wear and tear items which usually have maximum replacements allowed per cycle.

So Peugeot will be back to square one in disappointing its customers, with the very same problem that caused it to lose sales in the first place. They will be forced to walk away from certain claims and invoke the fury of customers all over again. Even with the increased warranty period, the same lame excuses will be used to duck out of their responsibilities as before.

Frankly, I will be surprised if Peugeot manages to increase their sales by 40% in South Africa with this offering. At best the maintenance plan and warranty is a long overdue basic and certainly does not provide a unique positioning as claimed by company officials. Peugeot will have to do substantially more if it is going to attract customers back to the brand. They may as well start with looking after their customers. It’s a concept they have often spoken about but never achieved and is the sole reason for their current poor form.

The message to Peugeot South Africa is simple. If you want to increase your sales substantially then go big……or go home!

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