Peugeot returns to China, taps StarEast for brand battle

The French automaker's parent, PSA Peugeot Citroen, will build Peugeot models in Wuhan (central China) next year under a joint-venture with Dong Feng Motor, which also includes two marketing departments for the Peugeot and Citroen marques. Peug-eot's sister brand Citroen has secured eight per cent of the China market with sales of 80,000 cars a year. Based on its 307 model, Peugeot will launch a new, locally-produced car in China in 2004.

The company has awarded StarEast Communications (which belongs to the Euro RSCG China Group) its branding campaign and product launch after a four-way pitch that included Ogilvy & Mather and Dentsu. Euro RSCG's VP (Grand China) Antony Chow said: "(Peugeot) will be positioned for the mass market in the medium price category, targeting primarily consumers aged between 25 and 45."

This is Peugeot's second push to break into the China market after it botched its first attempt when faced with issues relating to its spare parts. StarEast will develop a corporate brand campaign this year and will work on the product launch next year. Chow said consumers had a "neutral to negative" image of the brand.

He added:" There will be a brand revitalisation exercise to shake off the previous image. Consumers in the south know about the brand's past and also Peugeot (imports) are still seen in the streets there. Outside of Guangdong, people have heard about Peugeot, but the image, based on our research, is neutral to somewhat negative."

The launch of the new model will lead the charge on the consumer market. However, this time round, the marque is expected to face fiercer competition from rivals such as General Motors, Volkswagen, Nissan and Honda.