Suggestions for Citroën’s Future in Stellantis

By Geoff Fitzgibbon…..

Those of us who are fans of Citroën’s history, its many contributions to excellent personal transportation and its fearless innovation, are likely concerned whether the brand has a future within Stellantis. 

I include below a few suggestions for a possible future for Citroën, but first — some context might help in understanding these ideas:

How did we get here?

PSA has always had a grudging and mis-trusting relationship with Citroën, even before the 1975 takeover. The two companies’ cultures were completely different: PSA was always conservative and more driven by profitability than its more individualistic competitor. PSA was more like a French version of Daimler-Benz, while Citroën still embodied the orientation towards innovation of a Panhard or a Jowett. 

While PSA did provide some funds and leadership for new Citroën models, what it did with Citroën after the BX’s era was pretty unforgivable. With very few exceptions, it badge-engineered PSA models and diluted the Citroën brand’s DNA as a result. While Peugeot’s conservative engineering made Citroën models increasingly more reliable, it also made them less interesting. Citroën eventually became just the low-cost entry point for the PSA group.

The creation of the DS sub-brand in 2009 did little for sales or image; previous Citroën buyers were not persuaded. Superficial innovation such as the C4 Cactus’ “air bumps”, for example, could not hide the  fact that both Peugeot and Citroën divisions were producing forgettable and non-differentiated vehicles. 

In a perfect, corporate world, Citroën’s innovative traditions would have been prized and emulated by its owners for the opportunities for product differentiation they would offer. 

The list of Citroën’s technical advances are far more than just the wonderful oleo-pneumatic suspension of the 16H, DS and later models. Few manufacturers have made more interesting, rugged, easy to drive and supremely comfortable cars. Most models have also been relatively lightweight, easy to own, rationally designed, great to drive, attractive and relatively cheap-to-own vehicles. 

The new Progressive Hydraulic Cushion dampers have much promise, and PSA is to be congratulated for this new direction, but such ideas seem to be few; changing the look of the finely-chiseled, unique  Citroën logo into the “twin boomerangs” of today is suggestive of a lack of innovation rather than its presence, for example.

Market trends:

The future buyer of cars will likely have little knowledge or interest about a vehicle’s intrinsic qualities, unlike earlier generations who looked on cars with emotion and eager interest. 

Previous buyers saw magic in their cars and the personal freedom they offered. The emotional response a new design provoked then seems to be largely gone from most vehicle introductions today. 

This situation will only continue as future buyers enter the market. For example, over 60% of Canadians today do not drive their next new car until they take it home from the dealer. Many manufacturers recognise the trends and expect to make significant sales online, without the buyer even visiting a dealership at all prior to the sale.

Car reviews in all media acknowledge this lack of auto literacy, with their reviewers’ concentration on features that previous buyers would consider as secondary or tertiary buying criteria. For example, the number and width of touch screens, the degree of aggression in front-end styling, the number of speakers, how many electronic gadgets and cup holders the car has, and so on. 

One almost never reads how the latest car steers, corners or brakes, how well the headlights illuminate the road or how the car handles in emergency maneuvers. Mentions of potential depreciation, overall ownership costs or performance in consumer tests rarely figure, except in PBS’s “Motor Week” and the US Consumer Reports tests.

I borrowed a 2021 Subaru Outback a few weeks ago. Changing the audio, temperature and fan speed settings required stopping the vehicle to make the adjustments safely: tackling the huge tablet screen projecting from the dashboard was that complex. I can only imagine what Andre Citroën would have made of such an “advance”.

Most younger folks seem to have little interest in auto history. The incredible contributions of Citroën, both under Le Patron and afterwards, would have little relevance to today’s driver; it is all so distant and quaint to them. 

What excites them is often incomprehensible to those of us who grew up in an earlier era, when cars were more exciting and individual. In a world where many buyers view a car in much the same way as they also view a fridge or a washing machine, there is little room for emotion. I wonder whether a 2021 version of the “Goddess” would sell out the first year’s production within one weekend, if it were announced today?

For those of us who actually enjoy the smell of engine oil, the satisfaction of finally wrangling a stubborn part into its home, and getting to truly understand our rides’ mechanical systems, we risk being part of a dying breed.

Everything goes in cycles, and I have not lost hope for the future. I suspect a new type of consumer will arise as the world becomes even more homogenous, and she or he will again demand uniqueness; at least, this is my hope.

The international scene:

Globalization, inter-connected supply chains and corporate concentration are re-fashioning the world – as these and other trends have done in previous times.

The incredible increase in the numbers of the developing world’s middle class and its purchasing power is arguably the most powerful demographic trend we have ever seen.

The world market for automobiles is coalescing into a very few, large blocks:

Europe: wealthy, costly, amenable to government regulation and sympathetic to fighting climate change through reducing fossil fuel use. The most fortunate market in terms of the number of competing brands (import and domestic) and models. Copying US trends towards buying SUVs and luxury brands. Slow growth and over-regulation are its Achilles Heels.

North America: relatively cheap fuels and (compared to Europe) uncluttered roads. Generally not well disposed to government control. Low speed limits, straight roads and large distances. Oriented towards comfort, prestige, power, technology and space. Loves pick-ups and SUVs of all sizes. The US is the most dynamic and innovative country ever.

Japan: demographics point to a potentially terminal decline in population. Intrinsically protective and largely protected from imports. Massive expertise in technological development and manufacturing expertise that has a global footprint. The country’s limited space and large amount of regulation ensure smaller vehicles will always be supreme.

South Korea (and all other developed Asia): a blend of European and Japanese tastes and capabilities. Growing in wealth exponentially. Government policies favour expanding auto manufacturing and exports (except for Australasia). Unusually focused and nimble; very innovative in some areas, lacking in others. Highly productive, and very wealthy in the numbers of its people.

India: the previously “sleeping giant” of Asia. Its domestic market will quickly exceed that of China. It operates largely within the rule of law and its government will promote growth of the middle class to ensure political stability. Very likely to benefit from the West’s mistrust of China and the CCP and should benefit from western companies’ migration to its safer business environment; the one to watch in this century.

Developing world: continued progress towards peace and prosperity, especially in Africa and South America. Fewer failed states and greater African unity will contribute to the rise of that continent, which contains the world’s largest quantity of natural resources. Left-wing politics could derail South America, but several countries there have excellent capabilities and growing wealth, and should weather that storm. Usually hampered by poor infrastructure outside of the major cities. China’s hegemony and sunbsequent control of Africa through its “Silk Road Economic Belt” strategy is the big threat.

China: the great materialistic hope of the West, which is now rapidly losing its appeal. Despite its amazing growth of wealth in its cities, China is not a “normal” market: CCP intervention in all aspects of life, including investment and consumption decisions, will hobble its growth and stability in the long-term. Foreign manufacturers probably have a short window of opportunity before the CCP forces them to “sell” their minority stakes in their Chinese joint ventures, both as political pawns and to complete the IP transfers China depends upon. Increasingly bellicose and dangerous.

Bottom line: there are more and richer opportunities in auto manufacturing now than ever before; but there are also: greater competition, the risk of heavy-handed and irrational government intervention, geo-political threats, and new market entrants such as Tesla and Tata that could rewrite the play book. The old paradigms of 6-year product development cycles and multi-layered decision-making models are dead; only the nimble who can execute the correct plan well and fast will survive.


Stellantis

Given that the above may have a basis in reality, here are a few suggestions for Carlos Tavares on what to do with Stellantis’ many brands:

  • Taken together, the many brands of Stellantis have great promise. The speed and relative ease with which Stellantis’ car plants across the world can now switch to building a model from a sister company miles away offers great flexibility to respond quickly to changing demands. 
  • The ability to substitute another corporate brand’s designs should a market require it is a real strategic advantage.The current dominance of pickup trucks and 5,000-pound SUVs within North America, for example, could vanish overnight if a conflict breaks out in the Middle East, increasing gasoline prices and threatening its supply. Many are too young to recall the fuel line-ups of 1973, but they could return suddenly if conditions change. Fortunately, Stellantis has lots of differentiated models to choose from.
  • Forget reintroducing any French brands to N. America: Americans, especially, are unimpressed by anything French, and constructing an entire range of suitable cars with which to win national distribution would take years and cost a fortune. Opel with its German caché might stand a better chance, but that brand was killed in N. America by GM a few years back; and most of the better GM cars we have here are based on Opel designs already.
  • Take the best PSA SUVs and badge-engineer the bigger versions as Chyslers for N. America, saving lots of money and development delay. FCA still does not enjoy a reputation for making good, reliable cars; most of us recall the problems of the Dodge Journey, 200, Prowler and Neon; Peugeot build quality would work well for new Chrysler models; just add lots of cupholders.
  • Move Peugeot to compete with Mercedes in the vehicles’ looks, customer experience, performance, comfort and technology, but at slightly less cost.
  • Make Opel the performance brand for the middle market, badged here as Dodge cars and SUVs. A “budget BMW” would be the positioning point to aim for: better than a KIA but more affordable than an equivalent AUDI.
  • Be very careful with Jeep: trying to spread the Jeep DNA onto Italian SUV designs might conceivably satisfy middle America but it will fail eventually in other markets where there are so many more vehicles to choose from; brand equity is tough to regain after it has been squandered on solely meeting the next quarter’s sales numbers.
  • Lancia? Its history suggests carving out a position similar to that of Jaguar, but with more sophisticated styling and a younger image. Of all the Italian FCA brands, Lancia could have the best potential because of its glorious legacy.
  • Alfa Romeo as the next Porsche? Instead of yet more years of making higher performance FIAT lookalikes with better body designs, this brand should place Porsche clearly in its sights and develop an equivalent range of vehicles to the Germans. Its racing heritage could provide the gravitas upon which to rebuild the brand and to re-launch it in North America. The previous attempt to do so in 2008 was almost as badly done as the 1987 launch (and demise) of the Rover Sterling in the US.
  • FIAT should concentrate on commercial vehicles only. All RAM vans for the past few years have been badge-engineered FIATs, which have sold well. FIAT cars used to be interesting but are now boring slow-sellers, even in Italy. The unions would strike and protest loudly, but such is Italy.
  • EVs should be marketed only in the greenest European markets and within N. America. Despite the euphoria of their supporters, EV sales are tiny in comparison to ICE vehicles, are unprofitable and are only intermediate steps to new propulsion systems. EVs will not be real profit-builders for manufacturers or their dealers within the short to medium term. 
  • The EV Chinese market cannot be relied upon as long as the CCP is in charge. Worldwide EV sales are following the traditional curve of market adoption, where the latest thing takes off fast to begin with, then plateaus and some years later saturates the market. The stratospheric valuations of EV companies reflect only the “early adopter” stage of sales. 
  • Selling millions of EV vehicles (instead of the 2% – 3% share in most markets today,) will be much tougher – even with government subsidies and regulations.

And what of Citroën?

While the conventional wisdom might, at this point, suggest conveying Citroën to history, I see a specific and rosy future for the brand:

  • Citroën should be evolved and marketed as the best choice for the millions of consumers in the developing world today, and the many more millions (billions?) who will soon be approaching the level of wealth necessary to consider buying a car or a truck.
  • Citroën already has a history of providing rugged vehicles with compliant suspension, space, reliability and ease of repair. Building on those core strengths and the PSA group’s engineering resources would open up an opportunity in the market that Peugeot once owned but allowed Toyota, Hyundai and Daihatsu to take away.
  • Those competitors are all worthy, but all lack the Gallic ability to design cars slightly differently and better. For example, when Renault purchased its local sub-contractor Dacia of Romania in 2004 it focused on designing a range of vehicles car for Europe’s less developed markets – such as Greece and Turkey. 
  • The result was the Logan, a mid-size vehicle in sedan, wagon and pickup configurations. It was modern, comfortable, low-cost, simple to work on and cheap to repair. Canadians would find its PAS option, the absence of digital displays and touch screens strange, but we would enjoy the impressive, long-travel suspension with very effective dampening, its strong A/C unit, fuss-free repairs and the car’s overall reliability. 
  • Renault/Dacia have sold 4 million so far and the car is on its 3rd generation. Renault should have some Citroën competition.
  • Such a Citroën model would not be a new version of the 2CV, but it should emulate the daring innovations of the “Duck”. It would also be fitting somehow if Citroën were to “borrow” some design ideas from Renault, which brazenly ripped off so many of Citroën’s ideas in the past.
  • Making Citroën the more basic but rugged vehicle the developing world needs, based on innovating assembly methods, space-age structures, superb suspension and ultra-economical power plants, could recover the ground for good, reliable and long-lasting vehicles, and be the source for a whole, new family of vehicles.
  • Coincidentally, this new Citroën might find unintended markets elsewhere, as did Renault. Renault experimented with selling a few Logans in developed markets like the UK, and were overwhelmed with interest. Many people found out they did not need or want all the “latest and greatest” technology. All they wanted was safe, low-cost, sensible, efficient and comfortable motoring, and they bought the Logan in droves.

Well, that is my take on the market and my suggestions for the beloved Citroën brand, Mr. Tavares. Maybe some of it might be right?

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