PSA Group surely wishes it had a crystal ball. As the French automaker prepares to make a series of key decisions for its planned North American return, the future trade landscape between the United States and Europe couldn’t be murkier. Will U.S. President Donald Trump levy steep tariffs on imported European cars, or will existing and proposed tariffs crumble like the Berlin Wall?
That’s just one consideration company brass needs to weigh. Other hard choices involve selecting the types of vehicles Americans might want to drive.
The long road back to North America — a market Peugeot vacated in 1991 — began with mobility services, but the ultimate goal is to have the retail sale of Peugeot, Citroën, or upscale DS cars by 2026. Earlier this year, the automaker said it was eyeing 15 U.S. states and four Canadian provinces as key markets.
Speaking to Automotive News on the sidelines of the Paris auto show, PSA Group CEO Carlos Tavares said the company has entered a crucial phase of its plan. Exactly which PSA brand will make the boat trip sits at the top of the decision list, but the distribution model must also be agreed upon. In the past, the automaker has spoken highly of adopting a low-cost, cutting-edge direct sales model, but AN now reports the company has a traditional dealer network in its sights.
“For each of those strategic questions, there are several scenarios,” Tavares said. “We are going to decide between now and spring of 2019.”
As it formulates its retail plan, PSA has updated its Free2Move app, which grants users in several West Coast markets access to ride-sharing, ride-hailing, and other mobility aids — if you want to call them that. It also plans to unveil a short-term rental fleet in Washington, D.C. by the end of the month.
Just don’t expect to hop behind the wheel of a new Citroën C3 Aircross after touching down at Reagan. For this initial venture, PSA plans to lease Chevrolet Equinoxes and Cruzes. Eventually, PSA vehicles will supplement domestic and foreign makes in the company’s U.S. mobility fleets.
[Images: PSA Group]
The US market is saturated – forget it. Without some key distinctive features or pricing, this plan will fail.
PSA forgets the European market is highly protected, and that’s made their cars uncompetitive in an open market, especially French, Italian and English. Europeans have an absurdly high tolerance for crappy cars.
For a market that’s supposedly “highly protected”, isn’t is surprising that there are more car makers selling there than in the US?
Most of what’s offered in Europe, their “domestics” won’t sell well, outside the protected EU market. Not counting “import” automakers, that’s brands from several EU countries, making for a long list of brands offered. Many suck. The very best Europe has to offer are already for sale in the US, thanks to the lack of protection of US (Detroit) “domestics”.
The US is a tough market to break into. We demand great reliability, low cost of ownership, cheap to buy, high resale value, huge rebates, to name a few.
Then there’s those pesky “US Lemon Laws” weeding out the bad actors.
The vast majority of US car buyers are “private”, as opposed to corporate/company leased cars, so every angle is intensely scrutinized. This site is a good example.
Fun, specialty cars are great sellers too, including muscle/pony cars, Jeeps, etc.
By default, you could call “cheap fuel” an actual US “trade barrier”. Except we have a good share of penny pinching, cheapskates and misers.
Plus no other meaningful market can beat the US’ range of categories, sub compacts to fullsize cars/SUVs/pickups, with a huge midsize selection, even if fewer (redundant) brands to choose or not choose from.
And European consumers have more options for those models.
I’ll play around with the “configurator” build-and-price feature on the UK website, and I’m always struck by the price difference. I equipped a US-spec Fiesta SE 5-door with an automatic, popular equipment group 201A and climate control (as part of the cold weather package). Nothing fancy. Price: $19,105. To get a similar level of equipment for a UK-spec car, it was £20,395. That’s equivalent to $26,628…and it still has a smaller engine…and it has no touchscreen without navi. Add that, and it’s $718 extra. Even if you equip it with a diesel and a manual, which I think a lot of them do, you’re still talking about a $6,000 difference.
You can go nuts and get an ST with all the toys (which is probably how it comes) and in the USA it’s $26,245. In Britain, it’s £26,115 or $34,097. Overall, I just think that people in Europe are used to these prices.
You’re comparing prices before tax in the US with prices including VAT at 20% in the UK. Doesn’t explain all the difference mind.
With extremely high EU taxes, on fuel too, it creates trade barriers for import cars not designed specifically for the EU market, and impedes the export of EU cars to other markets with buyers less obsessed with how tiny the car is, how great the MPG and how small the engine size.
Yes silly things like reliability, resale value, total cost of ownership, comfort, style, etc.
Send us the Opel Insignia GSi Sports Tourer!
Wait you are right, I’m the only one who would buy one since it’s essentially a Regal TourX with a slightly lower ride height and a more aggressive suspension.
Are PSA vehicles currently sold in Quebec Canada? I was up there on vacation and didn’t see any.
No. Despite culture and French being an official language, it is still part of Canada, and sells what is on sale on the Canadian car market (which usually aligns with the US federal market, give or take some differences over the years, usually smaller manufacturers such as Skoda or Lada would sell in Canada).
Peugeot does sell in Mexico, even the 301 which is not available in most European markets (despite being built in Spain). Though conversely the 508 sedan does not look to be on the books there.
I suspect there are a few Fiat and Smart dealers that wouldn’t mind something that could bring in a little extra volume.
Standalone Fiat and Smart dealers (are there any left?) have probably learned their lesson and are likely not eager to go jumping for a European brand with an unknown future/success in the US.
Well, that’s the key question: where would these cars be sold? Unless your plan revolves around being exclusively a local ride-share model, you need a nationwide dealer network, and I can’t see PSA having pockets deep enough to establish one. I imagine there are dealers that would be happy to convert their FIAT “studios” to another brand, but I doubt that FCA would look too kindly on the idea. There’s not much going on at Mitsubishi stores and they could probably use a little extra traffic, but they now belong to those other French guys.
Unless we can get them with the mechanical jewel HDi and 3 pedals, they will just be another automotive appliance.
Will they have hairy armpits? Oh, wait, wrong site.
What we really need is the Dacia Sandero.
As a Canadian looking at the current political situation, and the threats from POTUS, I think welcoming imports from places like France would be a good idea, if just for our own use. We could build factories here as well which would employ Canadian workers.
As a market Canada is too small to bother. What they really dream about is to come to USA. Abroad (at least in Russia) Canada is considered as like another another US state and small one at that.
Selling cars only in Canada would be similar to those special models which were only sold in Australia.