Interview – Eurig Druce Citroën UK MD
“There is still plenty of scope for retail sites to deliver”
Eurig Druce became managing director of Citroën UK in February having held the position of sales director since 2016, and has worked within Groupe PSA since joining as a trainee in 2001, chiefly in field roles in sales and aftersales.
Here he talks about the brand’s £14.5m investment in West London, including physical and digital sales channel development, as well as hinting at some of the strategies he and his team have developed over lockdown to accelerate Citroën’s growth.
You recently opened a completely upgraded £14.5m showroom in Chiswick that Citroën has a large stake in. Why invest so much in traditional bricks and mortar?
“We’ve been present in West London for years, and it has been a hugely successful business, especially for retail and fleet sales. Now we have taken the chance to turn it into the sort of flagship facility that it’s scale and location warrant. It looks amazing.
“It’s important to remember it’s not just a retail site. It is located on one of the busiest roundabouts in London. It is a brand statement and it shows us in an impressive light in an area where many of our competitors are also active.
“Not all customers are ready for digital, and there is still plenty of scope for retail sites to deliver – the key is to be on the front foot in all areas, and then be ready to serve the customer whatever way they choose to interact with us. That’s why we work to the tagline of ‘Inspired by You’. This facility is a statement of our confidence to do that in a physical environment.”
Are your digital ambitions developing too?
“I think it’s fair to say that we went into lockdown near the back of the grid in terms of our digital capability, but we have accelerated now and I’d say we are among the leaders – we have opened a virtual showroom, you can reserve vehicles online, you can conduct live chat and in some areas we can arrange test drives to suit you. We have upped our game as customer demand has grown, and while there’s more to do I am very proud of what we have.”
How far do you think the digital journey will extend?
“Where we have to go is yet to be determined, and it won’t be us deciding but rather the customer. At the moment, the level of demand for home test drives isn’t strong enough to be able to offer it everywhere, but you could imagine it happening. Likewise, 24-hour or concierge servicing. These are all obvious extensions, and our goal has to be to be ready to offer it just as the demand reaches a level that it is financially stable.
“We can also lean on some of this in different parts of the business; for instance, the light commercial division already recognises the importance to tradesmen of having their van available all of the time to their livelihood, so we are trying to create some flexibility to allow work to be done at times that suit them. Even the design of the facility in West London has been thought through to ensure a fast entry and exit strategy for customers having work done on their cars; efficiency is at the heart of what we want to offer.”
How much of a hindrance to efficiency is Covid-19?
“It’s not a hindrance, but only because we have worked tirelessly to protect our colleagues and customers. The right protocols have been in place from day one, and they have been taken seriously throughout so we are able to operate to a very high standard.
“In fact, some things have become more efficient. You now book a test drive slot well in advance, so we can always be prepared; likewise you book to talk to salesmen, and if you do that the chances are you are serious about buying, so again there is efficiency there.”
Is there a risk that some of these efficiencies will reduce once Covid-19 is less of an issue?
“First and foremost we want the health crisis to be a thing of the past. As to holding on to the efficiencies, we will let the customers decide. If it works for them, it will remain in place, if not it won’t – and perhaps we’ll have a blend. But it would be a fool’s game to try to manage customer expectations – we will react to them.”
It sounds like you made a lot of big decisions during lockdown?
“The showrooms were closed, but the demands on all our time were huge – from the day-to-day decisions that needed making, to having the space to plan changes that could get us ahead. All that was on top of my personal situation, looking after the kids sometimes because my wife is a key worker.
“But we were determined to lay out where we wanted to be over the next three years. We made decisions on our digital strategy that have been implemented inside six months, which would otherwise have taken 18-24 months. You’ll hear more of what we have settled on in the coming weeks, but we feel we have the foundations to take a big step forward now.”
You have a lot of exciting new cars to base any plan around
“Yes – 11 new models in the next 16 months. 80% of our range will be electrified by 2023 and 100% by the end of 2025 – and all vans by the end of next year. I’ve always said I’ve had a lucky career, and once again I feel like everything is in place around me to be able to make a difference. We’ll tackle everything from brand positioning, to residual values, to different routes to market to the relationship with our network and the quality of it.
“It is a complete plan and cohesive. We are a unique brand, and we must take strength in that. In fact, we are also the most collected car brand in the world, and that love for our cars is also unique. There’s a love and loyalty that we must treasure and grow.”
The new Citroën C4 typifies that approach, presumably?
“It’s a car with big potential, and which fits our goal of offering customers a choice of petrol, diesel or electric power. It also morphs between some of the traditional segments of hatch and SUV, and the reaction from our previews has been positive.
“Better still, the residual value predictions are looking positive. That’s an area we’ve been below par in, and we want to be average or above in short order. The C4 is currently getting a prediction at the top end of its segment, so that is great: it’s 10% ahead of the Cactus, ahead of the Focus and on a par with the segment leader over three years and 30,000 miles.”
How have you improved residuals?
“Again, coronavirus has helped in some ways. We’ve focused only on doing quality car and van sales, with greatly reduced exposure in rentals and short-term leases. We just don’t do contract hire of less than 12 months now, it’s a complete red line. Our daily rental activity is down 72% and less than 10% of our total, helped by the market but we intend to hold that line as it opens up again. Last year, up until the end of August, it was 16.3% of one month’s registrations.
“Sure, that will cost market share, but it is not an activity that the bottom line will suffer much from. We are rebooting, and must stay strong to our principles”
You’ve mentioned LCVs. How important is the van market to you?
“Very, and growing. We have a 7.7% share of the LCV market and buyers like our offerings. It is a big part of the business plan going forward and we want the entire network to be able to sell them.
“It’s interesting, because the DNA of the brand shines through again. We sell a huge percentage of vans relative to others that aren’t white. We have a lot of small business customers who will typically buy in colours to suit them, who want that bit more kit which we offer, or the adaptability of using the vans for the family too.
“It’s an area of the business we have so much confidence in, even to the end of the year. Our order bank for October and November is 30% year-on-year for October and November. That’s a happy place to be.”
Are new and used stock levels a concern for you?
“Well, used stock levels are the lowest they have been for a number of years, and looking at the levels of returns to the business that is likely to remain the case for six to nine months at least. That needs managing, but of course the upside is that it helps residuals.
In terms of new, we have had a policy of building cars to meet demand during this period, not building in anticipation of demand. Some cars you can get today, some you will have to wait six to eight weeks for, but we think in all cases that’s acceptable, and certainly the customers we speak to are comfortable with that.”
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