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“We value the support of the Peugeot customers that have remained loyal to the brand over the years and would like to assure them that all service, repair and maintenance obligations will continue to be honoured”

“We value the support of the Peugeot customers that have remained loyal to the brand over the years and would like to assure them that all service, repair and maintenance obligations will continue to be honoured”

Peugeot has a huge opportunity in Namibia, one that this European manufacturer must not underestimate or play down its significance.

Over the past month, the company has on several occasions assured Peugeot owners of its commitment to the Namibian market after it has lost its local distributor. Interim arrangements with another dealer group have been put in place, and the full power of the Peugeot Citroen South Africa (PCSA) public relations division has been employed to keep existing owners in the loop and to ensure that Peugeot’s Africa dreams do not founder outside South Africa.

But the French automaker sits with a clear dilemma. It has invested substantially in a semi-knockdown assembly facility in Walvis Bay with a view (as stated by Peugeot’s top brass) to use this only as a starting point to market more cars into Africa. But go count the number of Peugeots on Namibian roads and it is immediately obvious that the local following is minute. I further suspect it will dwindle fast if the company does not soon come up with a tangible strategy to improve both perceptions and sales.

Peugeot used to have an excellent reputation in southern Africa. I grew up in a family where first a 404 sedan and later a stationwagon were the family’s prized motorised possessions. As a young man, I followed this tradition, becoming the proud owner of a 404 diesel bakkie.

That car kept me humble and taught me how to be a mechanic. To this day, I can fix most not-too-electronic vehicles from what I learned keeping my trusted bakkie on the road as a poor student. I am not knocking this car, on the contrary I was very proud of it. Despite being on the north side of 200,000 km when I bought it, with TLC it kept me going for many years. In fact, I once replaced the head gasket on the side of the road somewhere between here and nowhere in the most remote part of KwaZulu Natal.

I can tell dozens of similar stories of proud Peugeot owners who swore by their cars. Peugeot was a recognised brand enjoying huge respect from everybody who had one (or several). Every Peugeot was a true Kanniedood (there is no translation for this word).

Then they themselves ruined their reputation, first with the unreliable 308 and then by divesting. From that point onward, it was an uphill battle for the then belittled marque. Not even the very attractive later designs could re-establish their local credibility to the full.

It is not a matter of quality or looks. The latest Peugeots are all funky cars with all the bells and whistles expected of a European marque, but they compete against a plethora of new cheaper cars that are equally well-specced without the baggage of going into and then pulling out of a market.

There is however one opportunity that is glaringly waiting for a conqueror and I believe Peugeot can be the knight on the white horse if they so choose. That is to produce a cheap utility vehicle for a very large segment of southern Africa’s population but which would be considered a niche market in developed economies.

African families need a simple, trustworthy, reliable bakkie. Peugeot can even go dust off their old jigs and only modify the exterior. I am talking about a VERY basic vehicle with a 2-litre normally aspirated diesel engine, a 5-speed manual gearbox and rear wheel drive.

Remember, Peugeot bakkies never had a separate chassis. Similar to Ford’s Cortina, the 404 and 504 bakkies were basically modified sedans but their ability to carry heavy loads were legendary. The most obvious point is that there must not be a whole range of derivatives but only one standard model and its utility value must be universal. (You can have the Model T in any colour as long as it is black – Henry Ford)

If Peugeot’s engineers can get their heads around this challenge and revive their legendary quality, then they will sell hundreds of thousands of these cars in southern Africa. For us the nice thing will be that they are all built in Walvis Bay which is what we want for job creation and all the other goals we have for industrialisation.

This way, they will enter the local market at a technological level for which there will be a huge uptake, and they do not need to worry too much about emissions although I am sure the shareholders in France will see to it that we don’t get 1960s smog technology.

There is only one catch. Peugeot must be able to produce this bakkie for a maximum ex factory price of N$160,000. If they can solve that riddle, then their Africa future is guaranteed.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 28 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at www.economist.com.na. It is the first Namibian newspaper to go fully digital. Daniel Steinmann is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He regularly helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]

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