Toyota Aygo, Peugeot 107 and Citroen C1 Essay

Toyota Aygo, Peugeot 107 and Citroen C1- Success or Failure?

Executive summary

The Toyota Aygo and the other two improvisations of the same into Peugeot 107 and Citroen C1 are the results of a joint venture by Toyota, Peugeot and Citroen. The project was initially designed to enable the companies come up with a new brand that would yield in the market at a shared cost. Each company among the automobile companies had its specialization as well as area of best fit. With these differences in specialty, the companies were set to work on the Aygo brand, where each company played a discrete role. From the development, branding and the selling of the brands, the joint companies have done it as a partnership, sharing every cost and division of labor. The Aygo car, which was the first brand of the shared project, had qualities that were charming to consumers. The brand also lessened the assembly cost of the cars via cooperation. All the reformations of the models had the almost similar propelling capacity, as well as inner design. These resemblances mean that there were fewer less incorporated in the improvements of all the brands of the Aygo. The appearance of the vehicles from outside was outstandingly different from each other, capturing a wide range of customer interests. The naming also gave loyal customers the opportunity to buy from their favorite manufacturers. Continued marketing of the brands from 2005 to 2010 won a vast market, enabling extensive sales. Above all the merging of capital, experiences and technical knowhow made the project easy to accomplish.

The launch of these tree small vehicles was a great success in the market owing to the fact there were other small vehicles yet it hit high sales.

The companies achieved new brands at reduced costs, and at the same time met customers’ preferences and made a brand that most customers needed.

Introduction

The development, branding and selling of a product is a process that costs companies highly. At times, projects that companies undertake fail as a result of the high costs that the company fails to meet amidst the project. With this knowledge, existing companies form partial partnerships to work on projects, which are specific for those projects. Such partnerships reduce on the costs that each company has to bear before the project is successfully finished. In order to keep pace with the dynamic motor industry, companies need to constantly come up with new brands of vehicles, which will meet the dynamic consumer behavior. In 2001, Toyota, Peugeot and Citroen entered into a partnership, to work on a project to produce a new brand of small cars. Each company was to work on certain parts of the brand, and then share the common costs of the project. In 2005, this partnership gave birth to Toyota Aygo, which was the first brand of the partnership.

Later, the partnership brought forth several brands, of the same model. Apart from the Peugeot 107 and the Citroen C1 brands, this partnership came up with several models of the Aygo brand. As individual companies, each of these three companies has a group of loyal customers, who only buy products from the individual companies. Therefore, it was inevitable for the partnership to come up with brand names associated with each company. The modifications in each brand would attract a bunch of different customers. In that case, it was wise for the partnership to diversify the model they had come up with into different brands. Combining the selling strategies of each company gave the partnership a hybrid marketing strategy, which ran for several years. All these factors contributed to the success of the triplet brands. This report will dig deep into the strategy employed by these companies, attributable to the success and failure of the launch.

Development

Aygo is a minute car, and the name developed from the word I-go (Patton, 2012). The three care; Aygo, C1 and 107 were designed, developed and marketed by same car manufacturers with the aim of cost reduction. It is just one car, Aygo, which was rebadged. Rebadging is the applying of same logo or brand name to an existing product and subsequently marketing the different variants as distinct product. The product here is Aygo; the other two are the rebadges. The presidents of Toyota, Peugeot and Citroen, named the project B-Zero.

The introduction price of the Aygo was €8,500. The variation in the Aygo and its siblings is seen in the equipment fixed in the interior such as the logos, badges, as well as the easy to recognize car rear end. In the planning of the car development, the production was to make three hundred cars per year, having one hundred of each brand. The engines were developed in two versions; 1.0L three cylinder and the 1.4 HD diesel engines. There was a recall throughout the world by Toyota of the Citroen C1 and Peugeot 107 that were manufactured within the period February 2005 and then August 2009. The recall resulted from faultiness in the accelerator pedal that stuck in partial position of depression or come up to off position.

The years 2005 to 2009 saw various Aygo modifications such Aygo basic model that had two airbags, CD player and ABS. The next was the Aygo plus that, in addition to the basic model features got electric windows, side airbags and central locking remote. Then was the Aygo sport that had all the features of the first two models plus alloy wheels, fog lights and tachometer. The second and the third waves came between the years 2008-2009 and 2010-2014 respectively. The features increased with time ranging from colors to air conditioners and speed.

The branding of the car is done via small, simple modifications that have made the car popular. The small size, the competitive prices and the marketing have made the car hit high sales. Marketing has many times been done via motor shows in various places in Europe. In categorizing, the qualities prominent for both C1 and 107 are the light cluster big tail. It outspread from the rear doors’ edge up to the hindmost window, meaning that there is no exterior metal. The C1 model has a driving engine of 1.0L three-chamber engine with much fuel cost-cutting. The producers have described the C1 to be the second in terms of cost-cutting in fuel consuming within the car business (Patton, 2012). The branding of the cars has been a success in that the car has been positioned in the minds of customers. City inhabitants, especially in Europe, have taken the brands have minimal differences, but most customers have preferred the C1 that consumes the least fuel among the three. The competitors of the Aygo and its siblings are the European models; Fiat 500 and Mini. These are both short and light. The competitors have worked to outdo the Aygo unsuccessfully. The success buttons of the Aygo manufacturers lies in the partnership. Since development costs were shared, the car production and marketing was easy. The competitive advantage of the producers was the resources such as wide capital base and the technical know-how provided by qualified designers. Partnership provided power.

Marketing and selling

The European market for small cars and super-minis carries the largest market share. Mini cars take roughly 22.2% while super-minis take 22.4% of the market share. Taking a percentage of 22.2 of the market share, small cars have many customers or potential buyers, which manufacturers can target. With this information, Toyota, Peugeot and Citroen decided to produce a new brand of small cars for this vast market. These companies had other projects at their individual levels; hence it could have been a constraint to work on the selling of these small car products. Each company has a selling or marketing strategy that it applies for its products. Since the triplet brands were a joint product, the marketing and selling had to take a combination of the selling strategies. Most automobile manufacturers just launch their products for a while, and then get back to working on other projects. This short period investment on selling could result from poor selling strategy or financial constraints. The three companies had no difficulties marketing and selling their product since they had come up with a hybrid selling strategy, which had financing from each company. The pooling of marketing ideas from three marketing departments gave birth to a strategy, which won many potential buyers. Marketing for these products took place for a long period. The extensive production phase could have worked in favor of marketing. After the release of each new brand or model of the brand, the companies had to invest on selling. Each investment on a new brand or model boosted the marketing of the whole project products. Investing on selling and marketing strategy is important and that is where most companies in the automobile industry fail. Extensive marketing and selling worked in favor of Toyota, Peugeot and Citroen, making their products a hit in the European mini cars market.

Conclusion

As apparent from the discussion above, big projects entail; huge budgets, which are practically impossible for single companies. Inadequate capital to embark on a project is one major cause of project failures. The high demand of skills and technical know-how calls for companies to outsource some bits of the project, which needs a lot of money as well as other factors. A project is never complete without the product selling the real market. The branding of a product is equally important. In an attempt to solve the cost problem associated with projects, companies pool resources and come up with several brands of the same model. Toyota, Peugeot and Citroen pooled resources to work on a project in which they produced the three brands, Toyota Aygo, Peugeot 107 and Citroen C1. These companies identified a niche in the market and decided to take advantage of the need. Coming with a mini car would cost each company a substantial amount. Working on the project together saved the companies high cost and increased utility of each skill. The importance of branding come out clearly from this project as each company is able to get a company brand from the collective project. The success in the project is attributable to many factors, but most noticeable is their marketing strategy. The companies employed extensive marketing for the brands, from the time of launch to five years later. Project management also came in handy in the success of the project. The companies continued with research on the brands, modifying them to make them better and safer for consumers. The continued improvement on the brand, giving birth to sub-brands, also empowered the project. With the continued research and reporting, consumers could trust the products and at the same time get a wide range to choose from. The success of this project was a collective effort.

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