Diamond Dogs – The Distinctive Series Dissected – Part two

Berstein Research’s Max Warburton recently made some stark observations on brand DS’ prospects which make sober reading for PSA chief, Carlos Tavares. But is he right?

The Divine DS concept at Chantilly Style et Luxe. Image via frenchisgood
The Divine DS concept at Chantilly Style et Luxe. Image via frenchisgood

“Ill-defined, low consumer recognition and highly unlikely to generate shareholder returns”. Not my words, but those of the European industry’s current economic sage. But is Max Warburton being fair? Lets look at the evidence. Take DS’ brand identity. Is it a Citroën, a non-Citroën or an anti-Citroën? Nobody seems to be sure. DS has no visibility in the marketplace – few outside the industry or its followers knows what it is, or what it’s for. The cars themselves offer little to distinguish themselves from cheaper Citroën derivatives, merely fussier styling and a thin veneer of luxury. Neither the DS4 or 5 can be accurately positioned within their segments, being neither fish nor fowl; the DS4 in particular a symphony in pointlessness.

Citroën themselves are in the process of reinventing themselves as fun, functional and funky – the C4 Cactus doing a better job of being ‘DStinctive’ than any of the current DS line-up. Citroën are also putting clear water between themselves by placing a renewed emphasis on passenger comfort; soon to introduce a novel damping system aimed a providing the cosseting ride long associated with the marque. As an upmarket brand DS have no such plans, offering the jaw-clenching progress luxury car owners demand nowadays. As an upmarket trim level, a case could be made for DS. As a stand-alone brand, it makes no sense at all.

Hilton Holloway’s report suggests PSA is looking to the high-end fashion business for inspiration, which is of course we all know is bonkers. With the big name couture houses creating entire collections every six months, the pressure on design teams to come up with the goods is immense. This could never work in the motor business, where lead-times run to years rather than weeks. Furthermore, as anyone in the fashion business might observe, looking cheap is not the issue, but feeling cheap most definitely is. Because as anyone who has sat in one can attest, DS’ current range drips cynicism from every sliver of brightwork.

Building an upmarket brand from scratch is mindbendingly difficult, which is why relatively few manufacturers attempt it. Despite this, PSA seem certain they can make DS work on the cheap, yet evidence shows they’re underestimating the intelligence of the market. As FCA’s Sergio Marchionne is discovering to his cost, the gullible and curious might be taken in once, but are unlikely to be fooled again. Meeting customer’s expectations is a core strand to building a viable brand. Buyers need confidence in material quality, durability, customer service and resale value. Because without repeat custom, you’re wasting your time. These qualities cannot be magic-wanded into existence – they cost serious money.

The dilemma for Tavares is twofold. like all volume manufacturers, PSA’s margins are pitiful. Building mass-market cars in Europe simply isn’t profitable. A successful DS therefore could provide margins of up to £2000 per car, which adds up to a lot of revenue to reinvest into the business. But the DS3, their cheapest offering, is currently their best selling. Hardly a short cut to the sort of margins PSA needs to be making in order to make this venture pay. Should he heed the advice of Warburton by axing DS, he faces a massive climbdown and the prospect of finding the growth and profitability he requires elsewhere. By continuing to plough on, the risks are greater still. Both courses entail an embarrassing admission of defeat of course, but only one comes with potentially crippling costs attached.

Two years ago on these pages I asked if Citroen had got a jump on their rivals by creating the DS series, and in some ways they have. Both Renault and Ford for example are only now getting their upmarket offerings off the blocks and it remains to be seen just how they will fare. Nevertheless, PSA have failed to capitalise on their head start in building a sustainable and credible business proposition out of the DS brand. The time and huge costs associated with making this happen are so vast, any sane business mind would baulk at it. Perhaps Tavares is too committed to back down now, but as a new era dawns for his sprawling motor empire, it may be time to think again.

Author: Eóin Doyle

Founding Editor. [Dis]content Provider.

5 thoughts on “Diamond Dogs – The Distinctive Series Dissected – Part two”

  1. You hint at Ford´s Vignale label towards the end of the piece. It´s a trim level and the break-even point is much, much lower than a new line of cars. Even if they make no effort to sell it (by parking the cars in dark corners and no brochures) they will turn a profit quite quickly. Interestingly, I was in Dublin where there were poster ads for the Vignale around the place but when I went to the dealer the car was parked in a dark corner and they had no brochures…. It´s a lovely car though. The Mondeo is fundamentally good so the Vignale is a nice chance for someone to add more options at no risk to Ford. The DS cars are fundaementally the same as the cheap Citroens they are based on. They ask a lot of the base-brand whereas Ford´s foundations are secure. In the case of Ford I´d prefer if the Vignale was at the least a unique-bodied variant of the donor car e.g. just a four door or a proper shooting brake. Make the Mondeo a hatchback and call the four-door a Vignale. The shooting brake would be cheap enough given the global scale of the Mondeo platform.
    Incidentally, isn´t it true to say Lancia became Fiat´s equivalent of the DS line? They tarted up Fiats and sold them for a bit more money. Look where that ended up.

  2. PSA had 2 brands in trouble with dated products; Peugeot and Citroën. Now they have 3. Great!

    1. It´s at least two and one of them they invented in the recent past. Do you wonder how huge the salaries are of these people? People have their lives ruined for making mistakes at work that are simply minuscule. But if you sink a firm or lose hundreds of millions of euros you get a directorship on another company after a golden goodbye.

  3. I find the whole DS thing odd. Established car brands engender loyalty. Even old school Citroenistes with a Deesse in the garage will buy a C4 or whatever, even though they know it has none of the characteristics of its ancestors. But they just can’t shake off that brand-fondness.

    A few people might trade in their DS3 for another but, probably, only if they can’t find something more affordable and equally ‘stylish’ from Kia, or if their salary doesn’t know stretch to the MINI they wanted in the first place.

    So, yes, despite my dislike of its shameless poncing, using the DS moniker within Citroen actually was effective. But divorcing it from the mother brand weakens both it and Citroen.

  4. I think it’s still early days for DS. think back to the early days fo Lexus with their LS400 and even today in Europe, it is still seen as a luxury Auris. Yet in the States, it is a massive success and redefined a segment. I know none of the DS cars are as technically innovative, which forgiving brand definition and clarity, is their main downfall. If you are going to use DS as a name, at least elude to the technical tour-de-force of the Goddess. The near bankrupt PSA could not develop enough technology to make this so used a cheap styling-led solution, with even dodgier engineering solutions. Yet, I think if DS is given time to breathe and grow, they might just become something more than Vanden Plas or Vignale. There is a real problem in the ‘luxury’ or prestige market segment. Trust has dwindled in the Germans with ever cheaper, more mass produced vehicles diminishing their carved from stone and peerless quality. Many people automatically choose these brands, not because it is actually what they want, but what everyone else thinks they should have. Turn up in a base spec 7 series and everyone thinks you are sensible, and appreciate quality, turn up in a C6 and everyone thinks you are cuckoo. It’s a tricky line for the French to follow. I would say following trends from the Fashion houses IS a way to go. It is the one thing that most people will link France and Quality in the same sentence. It is their ISP without following the Germans, (look how successful the DS5 was that mimicked a Passat). Personally I would love t French design and their luxury vehicles to be more extreme, but then, I remember the fabulously bonkers CX Turbo 2.

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