Having finished a year, Aditya Jairaj, the MD of Stellantis India has swung into action with a series of measures for Citroen India.
14 Mar 2024 | 10990 Views | By Ketan Thakkar and Shahkar Abidi
Having been on the fringes for the most part of its presence in India, Stellantis, the world’s fifth-largest carmaker wants to give its French brand Citroen a new lease of life.
So far having relied on the phygital go to market strategy and hybrid work environment, Stellantis India plans ...
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Having been on the fringes for the most part of its presence in India, Stellantis, the world’s fifth-largest carmaker wants to give its French brand Citroen a new lease of life.
So far having relied on the phygital go to market strategy and hybrid work environment, Stellantis India plans to aggressively quadruple its touchpoints to over 200 to be closer to the customer and also set up a new office in Mumbai to work in close coordination with its management.
Having finished a year, Aditya Jairaj, the MD of Stellantis India has swung into action with a series of measures for Citroen India, with the expansion of its network, upgraded products, restructuring its top management and aggressive marketing spends, and wants to more than double Citroen India’s sales to over 2500 units a month.
Jairaj spoke to Autocar about the learnings from 2023 and how he is trying to put in place a new strategy to pull the Citroen brand into the mainstream.
Edited Excerpts:
Citroen brand continues to remain modest; you have been here for a year, how do you view 2023 and what can one expect in 2024?
We have evaluated the different aspects of the business in 2023, what went well, what did not and what the reasons were that contributed to shortcomings.
There are some changes we need to bring about.
First, we are in the business of selling cars, so the product is at the centre stage of what we do. We are upgrading our products with more features –the speed to market with some of these changes is noteworthy.
We've got a dealer network that we've established at this point. We have 58 points of sale.
We need to make sure that the network health remains green, and strong, because our dealer partners are our face for the customers. So, we've got some room to make some improvements there. Actions have already been taken.
Number three - the Citroën brand is young, it's new - the awareness is not at the levels that we would like. So, we are undertaking some very specific brand-building activities – the work is already underway.
This will have a direct impact on the awareness of the Citroën brand in India.
The fourth thing is that we need to assure our customers that we are here, we have a presence, and they need not worry about their after sales. People need to be made aware that Citroën is part of a very large group called Stellantis, amongst the largest auto companies in the world.
They need to see us. They need to see more points of sale, more touch points, if I may say, instead of points of sale. They need to see more Citroën touch points. To that effect, we have set ourselves a very ambitious target of reaching 200 touchpoints in the next 12 months.
We will have different formats for the touch points. They will not only build customer confidence but also give us more ways to interact with the customer and help us in establishing ourselves further.
How do you ensure dealer viability?
We are in the business of manufacturing cars and building our brand along with our dealer partners.Our dealer are in the business of selling cars and making money. So, if there is some imbalance in this equilibrium, ultimately all the stakeholders here suffer.
We need to continue to support our dealers during these times, in the interim, which we will, which we have and we will continue to do so. But ultimately, we want to make sure that the very cause of dealers being dealers, OEMs being OEMs, is satisfied. Where we satisfy our customers and, in the bargain, we make some money.
At low volumes, when will the dealer make money?
For dealers to start making money, volumes and throughputs have to increase. That's the simple answer to this complex puzzle that we are dealing with right now. So, for volume to increase, those four factors that I mentioned in the beginning are extremely important.
All of those need to happen. Now, we see today where we are in terms of volumes. Before the end of the year, our ambition is to make sure that we set ourselves at a run rate of between 2,000 to 2,500 units a month at least.
At that level, there will be a certain level of financial independence for all stakeholders involved. So, we have that trajectory in mind. Actions are being taken to ensure that we get to that level of volume because volume is a primary driver for these issues to be sorted out.
In the interim, we have to look at what the expenses are, what the profitability is, and how we can make adjustments.
The support that we provide to our dealers is also meant to encourage them to do things needed to sell cars. The need to have the right sales consultants with the right mindset in pushing test drives, which will be an extremely important tool in influencing a buying decision.
While we provide this specific support to dealers based on where they are, we are also trying to drive very specific behaviour that will help us showcase our products to the consumers to increase that volume, which is very important as we progress.
How do you justify expansion amid low volumes, would dealers not need support?
To put it very simply, the auto business is not for the faint-hearted. You know, we see ups and downs and we see our world being so dynamic.
It is for someone who is passionate about this industry and understands how things work. And ups and downs are part of any OEM's journey in almost every market.
While we support our dealers, we also expect our dealers to keep up their side of the bargain. And, you know, if I look at the Citroën network today, we've got some seasoned dealers. They've been in the automotive space for decades and on the other hand, we also have some relatively inexperienced operators. However, they are very hungry and they are very keen to prove a point, not just to themselves, but I'm sure to also their near and dear that they can succeed in this space.
We expect our dealer partners to work with us during these times and they have to keep up their end of the bargain.
Will you be adding new markets?
Yes, we need to make sure that we've got a good presence beyond the metro markets. This is not just in terms of sales, but also in terms of after sales and all those touch points. We are looking specifically at the Tier 2, Tier 3 and Tier 4 markets.
There is growth in the metro markets, but it's the non-metro markets that are actually expanding at a much faster pace. The customer needs in these non-metro markets may be a little bit different, but again, the customers are now very savvy and we've got opportunity in these new markets.
We are following a scalable approach in our network expansion. We want to provide peace of mind across different geographies, that we are present and customers need not worry when it comes to after sales.
If our network is not profitable, then we have got issues. The over-dealerisation leads to several pitfalls including an adverse impact on network profitability.
Given where we are and what our intentions are, the idea is not to over-dealerise, but to make sure that we are there at the right points and also with the right partners.
The intent is not just to be everywhere but to be at specific places with our existing partners or new partners in a scalable manner, which at the end of the day will be a profitable venture for our dealer partners and will help us sell more cars.
FADA is keen that Stellantis sign the Model Dealer Agreement. Will you be signing it?
All our agreements and contracts are aligned to the Stelentis Group's guidelines. And these guidelines are adapted to the country of our operations. These are defined keeping in mind interests of our partners. We make sure that the agreements and contracts we have are adapted to India and take care of the interests of our dealer partners and ourselves. So, while, you know, FADA is a respected body and we truly value their contribution, we're looking at the MDA (model dealer agreement), but at this point, all our contracts are aligned with the group's guidelines and are adapted to the Indian context, keeping the various stakeholders in mind.
You excelled well in the hybrid working environment, will you be encouraging going back to the office?
There is a need to work together in order to improve the different areas of operation. While remote working has proven very successful, at this point, we need to be together to take quicker decisions. We have just set up our office in Bombay.
In addition to this, you know, we have got our offices and engineering centers in Chennai, Pune, and software centres that are present in Hyderabad and Bangalore where we work very closely with these teams.
We need to continue to work with each other, whether it is hybrid or in person or remotely, because, you know, losing that human touch is something that we don't want to let come in the way of our work.
And as this expansion progresses, we'll definitely be looking at where we need to have additional presence.
What are your future product plans?
The segment over Rs 10 lakh is something that is growing at a much faster pace than the segment below Rs 10 lakh. That is very clear.
So, in terms of our immediate priorities when it comes to product, there are some changes we need to make on the C3 Aircross, which will happen very quickly. These are feature updates. They will happen between June and the festive period. So, it's happening quickly.
It is not just for C3 Aircross, but will also be applicable for EC3, where we have started seeing some renewed interest and also for C3. Then you will see further updates in 2025 – feature sets and aesthetics. We want to make sure that we don't fall back in terms of customer aspirations and we build the brand.
We are already thinking about 2026 and 2027 with the next phase of upgrades.
Building the Citroen brand and making it aspirational from a product perspective is very crucial for us to succeed in India.
More new products- will be CKD or CBU?
From a product perspective, there's more coming in 2024. In a couple of weeks, we'll have more details on the new product under Citroen.
Bringing in CBU, CKD, is that part of your thought process?
We're always evaluating what can be brought in from the Stellantis stables. We've got quite a few options. We are evaluating a few other things that could happen quickly. We'll talk more about that perhaps in the next few months.