There is a lot of talk here about "fourchette" marketing - pitching the products at the lower price driven end of the market and at the luxury end, leaving out the middle segments.
Renault, having designed the Dacia platform from a design brief of low cost, are in the unusual position of making good profit margins from cheap small cars.
In spite of various French efforts, the Germans occupy the luxury end. The middle is being squashed in margin and volume by the European economic restructuring.
PSA had hoped to take its C5 + offerings into the German image by making them in Opel factories. That relationship is on hold because of government intervention.
The CitroŽn brand has been position cleverly in my view in the luxury end of the middle segments of the market with the DS series. This is a hard territory to hold as the Germans are well placed to copy as VW/Audi, BMW and Mercedes are in there. The new A and B Class Mercedes are typical examples.
The 208 is a lower cost product than the 207, but it doesn't have the margin to take them into the Dacia territory.
PSA has to move more strongly into emerging markets, which it cannot serve from a French manufacturing base, in spite of the political pressures. They are planning a new low cost vehicle for 2014, branded CitrŲen and make in places like Spain. Using the 208 platform they are still not down to Dacia costs and so will have to be pitch a little more up market.
In recent years the two PSA brands have sold through parallel networks and have featured styling variants on commmon platforms. Now that they are combining the customer interface as a single unit, their is a logic in using the two brands differently. Discrete market segments will be defined by using one brand only. At the monment within Europe the 208 is the lower cost small car segment offering but in emerging markets it seems it will be a CitroŽn vehicle.
There will be, left over from a pre economic crash decision process new CitroŽn Picassos coming out early next year, right in the middle of the fork!