CITROEN’S new Dispatch is in sync with the market and looking good. So says Citroen’s head of commercial vehicles and business sector Jeremy Smith, who’s not worried that sister company Peugeot is using the successful Citroen Business Centre model as a guide to building its own network. Jeremy tells Business Vans how he sees the outlook.
Compared with the Peugeot and Toyota rivals, what do you think are going to be the key attractions to the Citroen Dispatch?
“With the outgoing Dispatch range, there’s L1 and L2 versions, the market has moved and got bigger so they’re both out of sync with the market. So the new range has small, medium and large versions, which are badged XS, Medium and XL.
“So the medium and XL now sit firmly where the competition is size-wise – which is spot on, but in doing that we’ve created a gap below. So we’ve introduced the Compact version – the 4.6 metre van, so it gives us a high cube, high load van – but with a very small footprint.
“We’ve been talking to the guy from Glass’s and he thinks there’s a real opportunity and we’ll do very well with that. It’s a unique vehicle in that sector – no one else has a van that fits in that niche we’ve created for ourselves. So that’s the number one opportunity.
“I think number two is that it’s the replacement for the oldest member of the range, although Dispatch sales were up by 27% last year. So although we lost a bit of ground, for a vehicle that was in its last year, that was clearly a dated product when compared to the opposition, it was still doing pretty well. There’s still definitely a market for our product at our prices.
“Now we’ve got the new product I think we will appeal to people in the SME market. People buy vans with their head; they buy cars with their heart. But increasingly, as David McQueen our head of LCVs for PSA said, today’s van buyer has a heart as well – they want their van to look nice!
“With the greatest of respect and I can say this as someone who had a Dispatch as a company car for three-months, you wouldn’t pick one for its aesthetics. However, you look at this new Dispatch and there’s no shame in putting that on your drive. So from the image point of view, we’ve got a product that will appeal.
“In terms of specification, on top of the three van sizes, we’ve got three trim levels: a base level, an Enterprise which is our best-selling level on all our van ranges and we now have an Enterprise+, which includes alloys, metallic paint and colour-coded bumpers.
“So we’ve got a product designed for the van user, but that will also appeal to the retail side and I think that gives us a fantastic opportunity for the SME customers. I think a lot of people will look at the new Dispatch and say it is a cost-effective, viable alternative to something they aspire to but cannot necessarily afford.”
Do you see this new van appealing to current Dispatch buyers, or do you now think there’s the opportunity to conquest?
“All van manufacturers would like to think that when we introduce anything new, that we’d like to sell it to all our existing customers and conquest lots of people as well. I don’t see any reason why a current Dispatch driver would be unhappy driving the new one – it carries more, it tows more, it’s a better package all-round.
“I think one of the most important things about this vehicle, is that it’s the first vehicle in this sector for 15 years to be introduced with a brand new chassis. This vehicle is built on the EMP2 platform and has passively adaptive damping, so the vehicle can tell whether its fully-loaded or not. Typically driving a van without a load is like a pea on a drum – bouncy and springy. This van can tell that and it feels planted even as an empty vehicle – it’s much more fun to drive.
“We’re very much hoping for a big uplift in residuals, therefore for the whole life costs point of view and rentals it will be competitive compared to where we are with the older, current vehicle. From an independent contract hire point of view, it’s going to be a better vehicle because it’s newer, it has the latest HDi engines and with the 1.6 BlueHDi version and the EGS gearbox, it’s capable of 55.4mpg with 133g/km emissions- which is class-leading.
“Vans are becoming much more like cars, people are not only looking at the aesthetics of them, they want to know what the consumption and emissions are like. We’ve got to be as good as the cars these days.”
You’ve received recognition from us for your SME position; do you think that will put you ahead of your other PSA brand – Peugeot, because you’ve already built the relationships?
“Yes, I think so, let’s face it Citroen’s had a Business Centre network for over 20 years now, I’ve been with the company for 23 years and they were called Fleet Business Centres when I started! The programme has evolved, but most of the 80 Business Centres today were Fleet Business Centres back in the day and indeed in a number of cases, sales people in those dealerships were there when I joined 23 years ago.
We’re doing a lot of static training with the Business Centre Network and the new van. They won’t see the vans till September, so it’s important that they touch it, feel it and understand the USPs.
Then they can go back to their dealerships, talk to their customers and their prospects with confidence about the new Dispatch.
“Now for their local SME market, buyers like that, they like the continuity that they can buy regularly, plus someone they trust and have built a relationship with. We’re doing a lot of static training with the Business Centre Network and the new van. They won’t see the vans till September, so it’s important that they touch it, feel it and understand the USPs.
“Then they can go back to their dealerships, talk to their customers and their prospects with confidence about the new Dispatch. We will open the ordering system to them in June, so they’ll be able to order their launch stock. We’ll also open the order books so they can order their stock and talk to the customer and tell them what’s coming.
“I think the Citroen network, because of its historical strength with SMEs, will seize that opportunity. I’m extremely lucky my Business Centre network is very professional; they work very well together and as body of people they talk to each other, swap stock and help each other out and because they sell in local areas, they understand what it takes to do that.
“I’m not interested in having dealers on board who want to sell cheap vans on the internet and sell them all over the country – you don’t need my Business Centre Network to do that. I say, I want you to build a business in your local area, build aftersales, build repeat business, it makes profit for you and it builds a loyal customer base for us. We’ve got that and I believe that’s where we will score.
“To be absolutely fair and with my PSA hat on, my colleague Nick Crossley at Peugeot is doing a fantastic job at building a Business Centre network. He’s got a hard job on his hands, as they don’t have a history of selling fleet. Peugeot have been historically consumer focused and the fleet they have done has been big ticket stuff like the police.
“Actually there’s no reason why a Peugeot dealer couldn’t do the same as us, but you can’t build that over night. Put it this way though, if they don’t go for a Citroen van I’d rather they went for a Peugeot than a Fiat, Ford or a Vauxhall. That’s one of the great things with Carlos Tavares coming on board.
“Yes there are fewer of us, yes we are having to work a lot harder than we ever have had to do before, but actually we work as a team much more. I couldn’t envisage talking to Peugeot two-years ago, yet we had our stands together at the CV Show and we had our launches simultaneously.
“We’ve got more of the mid-range models and they’ve got more of the top end – as befits their positioning as a more premium brand than us. We benchmark Citroen against Renault and they benchmark Peugeot against Volkswagen. So we try to move ourselves apart, but by being different we can conquer more of the market. Nick and I work hard together to say when we do things, we try to stand back-to-back and look at the outward, rather than toe to toe and hit each other on the nose.
“The secret to having a successful Business Centre network is to have a consistent set of standards, rewarding people for doing the database and marketing properly. Peugeot have realised that in order to achieve what we’ve got, they need to invest now. Nick’s been doing that for the last 18 months or so and he’s having some good success with it.
“But Peugeot has 230 dealers and they have 60 Business Centres, I’ve got 180 Citroen dealers and 80 Business Centres. Those 80 centres account for 80% of all the land sales we do – because as well as looking after the business sector, some of them are also the big fleet dealers. The challenge for me is to get the other 100-odd dealers to sell vans as well!
It seems like Citroen has had a lot more success in smaller fleets than Peugeot, yet they are looking at your area of the market – are you worried?
“We try hard not to compete, at the end of the day if we only go out and sell on price then there are people who say they don’t care if it’s a red Dispatch or a Blue Expert – which is the cheapest one? We try to avoid that and Peugeot has gone after big fleet, such as the Post Office.
“Citroen’s national fleet operation, that I was part of, tends to target national fleets up to 300. However if you asked me where I want to be, I’d rather have 100 customers who buy 100 vans per year, than two customers buying 5,000 each.
Citroen has the SME heritage and infrastructure in place, Peugeot are trying to grow it, so yes potentially they will steal some from us. It will make the Peugeot network stronger, which is no bad thing, but it takes quite a long time to do that.
“Citroen has the SME heritage and infrastructure in place, Peugeot are trying to grow it, so yes potentially they will steal some from us. It will make the Peugeot network stronger, which is no bad thing, but it takes quite a long time to do that.
“Nick’s been doing a good job, but last year the Business Centre volume grew by 24% year on year. Quarter one this year its grown by a further 17%. So with better products including the Berlingo, improved availability of Dispatch and Relay, plus the Citroen ‘Ready to Run’ programme, which we sold 430 vehicles, up from 130 when I started and in the first quarter we’ve done 140 already.
“Those are incremental sales; those are sales that we didn’t have before. People don’t just go and buy a tipper instead of a panel van – so that’s a completely new market for us and growing. We’ve told Tavares we’ll do 750 this year! Peugeot don’t do ‘Ready To Run’, because their network is not sophisticated enough to deal with that – they will do eventually, but we’ll be ready for that.
“To be honest we’ve picked up contracts that Peugeot wouldn’t be able to supply as they haven’t got the chassis. So I’ve picked up a deal for some dropsides and a deal for some Luton vans. These are tenders that Peugeot won, but couldn’t supply, so we’ve switched them into Citroen. So that’s where the two parts working together works well.
“By the same token Peugeot have a long heritage with a customer base for a few conversions into motor homes – I have no interest in that, plus horseboxes, I get approached a lot about that. So I’ve said I’ll do ready to run and you do those.”
Do you see Enterprise as the key trim level for SME buyers?
“I’ve just spoken to the guy at Glass’s and he reckons that vans will be marked down if they don’t have air-conditioning, because of the duty of health and safety. That’s why I upgraded the spec of all of our chassis cabs to Enterprise spec which includes air-con, so someone who is buying an Enterprise is not buying a lower spec. Plus it will help when it comes for resale at auction.”