Peugeot CEO: “Combustion engine will be dead by 2030”
Great products, not-so-great year: that's how Jean-Philippe Imparato summarises Peugeot's past calendar year. But 2020 will be fantastic. The future's electric, and Peugeot is ready, the brand's CEO says at the Brussels Motor Show.
How did 2019 go for Peugeot?
“We had a fantastic story in terms of product, with great feedback on the new 208 and 2008 models. Plus, the brand is ready for electrification. We defined our message around this as: 'Buy your Peugeot and choose your powertrain'. That's the idea of the power of choice: whatever powertrain the consumer chooses, he can have a Peugeot.”
“And with the new Peugeot 508 Sport Engineered, we add a touch of pleasure. The first step of what I hope will be a full line-up for Peugeot in the coming years.”
“So, 2019 was super in terms of product – but not always super in terms of markets outside of Europe. We withdrew from the market in Iran, where we used to sell 443,000 cars. There were adverse market conditions in Argentina, in Turkey and in China.”
Bram Schot, Chairman of the Board at Audi, has caused some controversy by stating that cars will become much more expensive in the upcoming years. Do you agree?
“Yes. Why? Take an average car today. In the coming years, it will change profoundly: it will become increasingly electric, connected and autonomous. If you pile up all these technological innovations, of course, you will increase the price.”
“That's why we have to proceed very carefully. We can innovate at full speed, but we are not the boss of the company – the customer is. And the question is: how much are they ready to pay for increased electrification, autonomy, safety, and so on?”
“Here's an example. If you want a level-4 autonomous car in the next two years, the extra cost is between €15,000 and €20,000 per car. Nobody will pay that. That's why we as a brand say: autonomy up to level 3 is affordable for cars. Level 4 is for shuttle buses and other public transportation vehicles.“
“This goes for each and every new feature that is proposed by our suppliers. We will have to find ways to be leaner in terms of product and offers, in terms to stay within the price band that is affordable for the average customer. That's why we have to be selective with the technology we introduce.”
“But we'll never forget that our Peugeot customers always require a move upmarket. For example, more than half the 208 sales today are GT and GT Line. In other words: an upmarket product in an affordable price band.”
“That's why all brands are speaking about (private) leasing, by the way: it's becoming a key sales tool because it's the ideal way for many customers to obtain the car they want.”
Peugeot CEO Jean-Philippe Imparato (left), Fleet Europe Editor-in-Chief Steven Schoefs (right)
Both Peugeot 208 and 2008 are available in full-electric version. Is electric driving the future?
“If we look at the coming decade, and if we consider an urban and suburban environment, the answer is yes. Especially if you want to reduce CO2 emissions by 50% by 2030. And further into the future? I don't know. Perhaps we'll see new technologies.”
“But electric is not just a solution. It's also a pleasure to drive. If you drive an e2008, you'll buy it. It has all the qualities of a 2008, plus silence. It's amazing. Everybody is talking about electric cars, but too few people are driving them. Let's change that.”
And why aren't we driving them already?
“It's a question of offer. The models are coming. We're organising a Peugeot Electric Tour, a Road Show and more, in order to send a message to the market. I imagine my colleagues from other OEMs will be doing the same because we're all entering a new era. Everybody's switching to electric. My message to the customer is: take your time to test-drive an electric car, and you'll want to buy it.”
Long delivery times for EVs and assorted batteries are often cited as an obstacle for going electric. Can Peugeot guarantee speedy delivery?
“Today, I'd have to say April, May. I don't know if you consider that reasonable. It also depends on the volumes we're selling. And I'm positively surprised by the volumes. The conversion rate from fossil-fuel to electric is far higher than expected. At present, the share of EVs in our global order book is more than just double-digit.“
How long will Peugeot still offer ICEs, do you think?
“Well, if you want to reduce CO2 emissions by 50% by 2030, then you have to assume the non-hybrid ICE segment is dead by then. Of course, the evolution will go faster in some countries, depending also on the political will, and in some segments – for instance, urban cars.”
Within Groupe PSA, and considering the linkup with FCA, what is the future position of your brand Peugeot?
“Stable. Peugeot is a brand with 210 years of history. We are old. The specificity of our brand will be protected in the future. So I don't see any impact.”
“I had the same question when PSA acquired Opel. But the brands within the group all occupy different territories. And that will always be the case.”
Final question, about your B2B customers. How important is your relationship with those large fleet operators?
“They are our top customers. We're talking about hundreds of thousands of cars per year. And our relationship with them will become even more important than it already is today.”
“Why? Because the market is switching to TCO – it's the language of the fleet manager. And as our industry will move towards TCO, the B2B ecosystem will remain our top priority in the years to come.”