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Success follows Favey to UK and a 5% sales share

Alain Favey, who spearheads Citroen's unprecedented sales growth in the UK, is at 34 already a managing director for the third time. It could just be he's seen as a fast track executive within PSA Peugeot/Citroen.

In less than a year, Citroen's market share in Britain has gone from 3% to more than 5% and sales are expected to leap from last year's record of 84,491 cars and light commercials to 150,000 by the end of December.

For Mr Favey, success is becoming a way of life. At 30, he was managing director of Citroen Denmark and sold a record 15,000 cars. Then came the MD's job in Belgium where he presided over a record year in 1999, selling 45,000 units.

After studying at Hautes Etudes Commerciales in Paris, the leading French business school, Mr Favey joined Citroen in Vienna, working in the marketing department. There he learned many aspects of the business including how to sell cars. “Everything I do now relates back to those first few months – particularly how to deal with customers,” he said.

Citroen's UK upsurge has been based on the Xsara Picasso, launched two years ago and now Europe's biggest selling MPV. Mr Favey said: “Some 80% of its sales have been conquests and the UK has taken 25% of all Picassos built this year. We could have sold more had we been able to get them.

“Many companies project this kind of growth over five years – we have done it in five months. Citroen has never experienced anything quite like this even in its other major markets – France and Spain.”

He admitted the pace had put a strain on Citroen's UK dealers. “They have had to cope with selling, preparing and delivering an extra 47,000 cars this year and that is not easy,” said Mr Favey.

“They have had to look at their operations and take on more staff, and we now have to make sure we keep the momentum going.”

Dealers are not complaining. With rising sales they have seen profitability increase and Mr Favey believes there is still spare capacity in the system. “We have 250 dealers – quite a large number for a franchise our size – but we have good geographical coverage,” he said.

He saw no need to increase that number as he shoots for 6% market share by the end of 2002. “The network is nicely balanced – we have 30% of sales going through the large national dealer groups, 30% through regional groups and 30% through 'owner-drivers'. We are keen to keep the smaller dealerships because through them we get closer to our customers.”

The remaining 10% of sales are through Citroen's five wholly-owned dealerships (two in London and one each in Birmingham, Glasgow and Manchester). Again, Mr Favey saw no need to increase that number.

While Picasso has been the star performer, there have been sales increases through the car and commercial vehicle ranges. The C5 has taken off quickly and established models continue to sell – even the C15 van, launched in 1984, has seen sales increase by 10% this year.

Saxo, near the end of its life, continues to enjoy a boom among young buyers and the VTR and VTS versions are the UK's best-selling hot hatchbacks for the fifth year running. “We continue to offer young buyers a good package, value for money price and a year's free insurance which is a big attraction in this segment of the market,” said Mr Favey.

Citroen is now the fastest growing car brand in the UK. Sales are up 60% year-on-year at 105,168 units to the end of September – already outpacing 2000, the brand's best ever year in this country.

Picasso is the best selling MPV in the M1 segment with a 27% share against the Renault Scenic (22%) and the Vauxhall Zafira (17%).

In September the recently launched C5 outsold the Renault Laguna and Vauxhall Vectra in the M2 segment while Berlingo is the third best selling small commercial vehicle behind Escort and Astravan.

Diesels have been yet another success story with market share growing year-on-year from 5% to 8% in an overall diesel market which has grown by 32% in 2001.

Success had not all been about product. “The whole package has been right – advertising, the dealer network's ability to adapt to increased showroom traffic and the prices are right.”

Citroen's UK dealership network is now geared to 150,000 sales a year and Mr Favey saw 2002 as a year of consolidation, though the C3 would be launched in the spring. “We will continue to sell the Saxo as a 3dr hot hatchback while C3 is clearly a 5dr family car, starting with a 1.4. I don't see it taking sales away from Saxo and it will help add sales as we aim for 6% market share.”

Mr Favey did not believe a major recession was on the way and thought the basics in the market were right. “We are planning for a stable market next year,” he said.

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