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Citroen changes cashback strategy

Nine years of launching new Citroën models with large discounts are to come to an end this summer.

Cashback and ‘no VAT’ showroom promotions will be dropped when the French firm launches its revitalised C5 medium car range.

Offers that have underpinned the brand’s growth in the UK market are to give way to a fresh focus on innovative technology and a dramatic improvement in product quality. However, Citroen has no plans to drop cashback on existing models like the C2, C3 and current C5.

Citroën UK communications director Marc Raven told AM: “There’s no doubt that money-off campaigns have served us well and played a significant role in helping increase our market penetration, but new-generation products with highly competitive style, technology and overall appeal have individual strengths and we’ve decided the time has come for a change.

“Cashback has not been used on our last three introductions and our experience shows we are now able to retail vehicles without discounting, particularly if sales are backed by no-cost finance offers over three or four years.

“As a result, cashback will no longer form part of our strategy for retailing new models.”

The change will be put to its biggest test with the C5. Aimed to appeal in the upper-medium sector as well as competing with the VW Passat, it is likely to be priced to undercut the Ford Mondeo while offering higher specification levels.

“We’re confident that this car meets premium standards. It looks distinctive and has the individuality you’d expect of a French product. But there’s nothing quirky about it – you can’t afford to scare people in the D-sector,” said Raven.

Citroën made a big impact with its first £1,000 cashback promotion in 1999 and lifted registrations from under 80,000 to more than 130,000 with the launch of the Picasso MPV. Total volume last year reached 123,000, including 2,400 sales of the C5.

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