Peugeot brand CEO Maxime Picat has told just-auto that he sees no sign of slowdown in the Chinese car market and that he sees plenty of potential for further growth for Peugeot there.
Picat was in London this week for the reveal of a revised (mid-cycle refresh) 508 model, a vehicle line for which Chinese sales will be very important. The car is produced at Rennes for the European market and Wuhan for China, where it will be launched in January 2015.
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“We are doing very well in China,” said Picat. “There is no sign, for us, of any slowdown to the market.” Peugeot sales so far this year are up 28% to 157,000 units. In the month of May, Peugeot shipments to China reached a record 34,000 units, 47% up on last year. “Of course, we can see there are concerns over air quality and measures are being taken by the authorities to deal with that, but despite these limitations, demand in China remains very strong.
“There are 1.4bn people in China and there is a large part of the population that enjoys European-style income levels. Motorisation in China remains very low by international standards and there is much potential for growth,” Picat maintains.
Picat, who has previously headed up Peugeot’s DPCA joint venture with Dongfeng in China, points out that it is vital to have the right models in the Chinese marketplace. “The C-segment is especially important in China if you want to appeal to the emerging middle-class consumers,” he says. In that segment, Peugeot offers the 301 and 308. “The 308 notchback is a very, very big selling model for us in the Chinese market.”
Why is the three-box sedan body-style so big in emerging markets like China? Picat offers a couple of interesting observations. “Look, hatchbacks are popular in the B- and C-segments in Europe, but elsewhere in the world, sedans are much more significant in these small car segments. In Asia and South America, the notchback typically accounts for around 50% of the B- and C-segment market, so China is in line with the global picture. Europe is actually the exceptional case.”
However, he also says that the Chinese consumer is attracted to the symmetry inherent in a three-box shape. “It’s partly about harmony and balance,” Picat says. “The two-box hatchback shape does not have that, but a three-box notchback does have that basic element of balance and symmetry. This sense of harmony also extends to the interior design that will appeal to Chinese consumers. You have to understand how important that sense of harmony is in China. A single small screw that stands out because it is not colour matched might be unnoticed by a Western consumer but can be noticed in a negative way by a Chinese consumer. You have to be aware of that.”
