Peugeot dealers angered by attractive deal offered by Sixt and 1&1

20 March 2017

Sixt and telecoms provider 1&1 are offering an attractive leasing deal on the Peugeot 208 which is proving popular among end consumers but is angering Peugeot dealers in Germany. 

This naturally fits with PSA Group’s move into online car sales but this strategy and the likelihood of further similar offers will not please the dealer network. Dealers face increasing competition from growing online car sales and leasing companies such as Sixt, which itself has just announced that it sees online selling as core to its business. 

One Peugeot dealer with multiple sites has complained that ′It is a catastrophe that something like this is on the market. In order to offer my customers a similar deal, I have to give a 39% discount.’ 

Benno Gaessler, managing director of Peugeot Deutschland is trying to calm the situation, however. He says ′We are currently running a limited campaign with a very specific vehicle model. This is by no means directed against the trade. Rather, it is an attractive offer, which 1&1 is promoting through extensive advertising measures.‘  

Peugeot is of course also benefiting from the advertising campaign as it is generating interest in the 208 model. Boosted by this offer, Sixt Leasing has raised its contract closing targets by almost 15 percent to 36,000 units in the current year and data analysis reveals that there is growing interest in all models on the Peugeot website, according to an article in Kfz-Betrieb. 

Gaessler added that ′The campaign is driving the brand’s visibility and pushing customers into the showrooms of the Peugeot dealers. If you are looking for a good offer, which exactly meets your needs, the Peugeot dealer is the best.‘ A small dealer has commented similarly that ′I also see this as an opportunity for more customers to come into the car showroom.’ 

The dealer association has not commented on the offer but many Peugeot dealers have already spoken out against it.  In particular they question the logic at a time when the brand is in a stronger position than it ever has been and fear that its image will suffer. One dealer said that ′In the best case, only the Peugeot 208 gets junk status, in the worst case it is the entire brand.’ This naturally runs the risk of undoing the improvement to Peugeot’s brand image in recent years. 

Gaessler sees this differently though; ′The upwards trend of Peugeot is clear, with the current Car of the Year 2017 award for the 3008 underscoring this. After the 308 in 2014, Peugeot has been honoured for the second time within three years – the products are right.’  He is convinced that the brand image is strong enough to not be tarnished by offers such as this.  

However, underlying this is the crucial wish to increase volume and gain market share. ′We want to grow together with the trade and sell more vehicles. This also includes a model, which uses other sales channels than the usual. The form and extent need to be checked.’ 

With special offers such as this also unlikely to be one-off campaigns, dealers increasingly face a bleak future and could ultimately just become centres for consumers to view and test drive cars, with the order being placed online later. Their response to this specific offer is undoubtedly part of wider concerns about the challenges they face and the predicted contraction of the dealer network. 

Photograph courtesy of Groupe PSA