Peugeot eyes VW sales

But Peugeot wants to take it to a new level. It says Volkswagen has most of the ingredients of success - except expensive ownership costs. Peugeot Australia director Bill Gillespie believes Peugeot can follow Volkswagen's lead but return value to Peugeot owners with cut-price ownership costs.

As part of a repositioning of Peugeot, he says: "We need a balance between being an aspirational marque and one that is affordable.'' "It's not easy to achieve. Volkswagen is one that has found the balance and that's what we aim to follow. "It's why we have introduced our `assured service' plan.

"If you compare the cost of servicing a Golf and our 308, you'll see that by 60,000 the Golf has cost $2600 to service. "The 308's cost is $990 - that's fixed servicing at $330 a year for the three years of 60,000km. It's a point of difference for us. "The low cost to own our cars is changing the way people see Peugeot and now make them consider buying a Peugeot.

''The assured service program will continue for the new 208 which is expected in showrooms in September. Peugeot Australia plans sales of about 6500 vehicles this calendar year - its sold 5220 in 2011 - on its two Mitsubishi SUVs, the 4007 and 4008, and its new mid-size 508 range plus the 208.

But while cloning Mitsubishi SUVs has led to a hike in buyers for Peugeot, the flirtatious cross-country deal is set to end. The 4007 - a clone of the Mitsubishi Outlander - ends in January 2013. Gillespie says Peugeot will make its own large SUV for sale in 2014. There are no details of the new SUV but it is likely to share components with the 508.

Meanwhile, the popular ASX-based 4008 will continue until the new General Motors and PSA Peugeot Citroen alliance begins in 2016. The two SUVs have helped to prop up Peugeot during times when the 508 and outgoing 207 had supply issues. "

The 508 was one of the victims of the Japanese tsunami,'' he says. "One part of the gearbox came from a factory affected by the tsunami, so production was delayed.'' Peugeot has overcome some supply issues to boost fleet sales - now 13 per cent of Australian Peugeot sales compared with 6 per cent in 2011 - though Gillespie says he doesn't want to see Peugeot become a fleet company car.

"It's mainly user-choser sales that we're winning for fleets,'' he says. "Part of the appeal of our cars comes from making them a better car than previously, and helped by the high Australian dollar's exchange rate. "The 508 GT is way, way underpriced compared with Audi and BMW models - and the GT offers a lot more.

"It's also about $1000 less than a Volkswagen Passat, so when you add in the service program, the Peugeot is a much better deal.'' While Australia is expanding its Peugeot range - and dealerships with another three sites opening in Sydney in the past three months - it has pulled back on the higher-tech models.

Gillespie says the lauded 3008 Hybrid4 and 508 RXH hybrid cars are off the table - at least in the medium term - for Australia. The 3008 Hybrid4, touted as the world's first mass-produced full diesel hybrid, is now on sale in Europe. It has a 122kW 2-litre turbo-diesel driving the front wheels and a 28kW electric motor on the rear axle. The average fuel consumption is 3.8 litres/100km.

The 508 RXH uses a similar drive layout. Peugeot previously said it planned to have the two hybrids in Australia for the Australian International Motor Show in Sydney in October. Gillespie says the 3008 will be trialled in New Zealand with view for a sale and believes the backtrack on the 508 version for Australia may be based on the technology's durability in hot weather.

GM and Peugeot's parent company PSA announced in March they would share platforms and vehicle development. It will end PSA's association with Mitsubishi, Ford, BMW (which has now aligned with Toyota) and Fiat (now with Chrysler). It is also a slap in the face for GM subsidiaries in Europe, Opel and Vauxhall, which are direct competitors of PSA.