Citroen and Peugeot could develop new sub-brands to tackle Renault's Dacia budget offshoot

Sister brands Peugeot and Citroën will take a different approach to tackling the rise of Renault’s budget Dacia offshoot with new models and, potentially, new sub-brands in 2013. Peugeot will launch an £8000 budget saloon, codenamed M3 and targeted at developing markets in eastern Europe, China, North Africa and Latin America. The new 4.15m-long saloon is also set to usher in a return for the Talbot badge, last used by Peugeot in the 1980s.

The M3 is understood to be undergoing chassis development work, although its underpinnings remain unclear. One unlikely suggestion is that Peugeot could keep costs down by modernising the old 405’s platform, a car still on sale in Iran. The more probable scenario is an updated version of the 206’s underpinnings.

A Citroën version of the M3 is likely for China in particular, given the firm’s success there. August was the first month in Citroën’s history when it sold more cars in China than in its native France.

More significant is Citroën’s plan to turn on its head the idea that a simple, functional car must have a budget price by launching such a vehicle with a more premium price. This car is codenamed M4 and will share its underpinnings with the M3.

Citroën has outlined its vision for this approach with its C-Cactus and Lacoste concepts, but it is understood that customer clinics revealed that the firm had taken the minimalist approach too far.Citroën product planning chief Thomas d’Haussy said the firm was planning to do “a car with not all the equipment, but with the things that are most important.”

It is understood that this model and any potential variants would complement the DS range and could be as simple as reskinning the M3’s interior with vastly improved materials and trims.

“Some customers want the best of the car and we do this with DS,” d’Haussy said. “But we also see customers who want to live differently with the car. They think cars have become too complicated, with too much equipment.

“You can give more to some customers by giving them less in some aspects. It’s to do with trading — you could make some things nicer and more designed, and others simpler.”

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