Peugeot returns to the US

PSA CEO Carlos Tavares today revealed the French-based car-making conglomerate had signed off on a plan to assault the market it abandoned 28 years ago.

Even now, though, the French aren’t in a hurry, planning only to have a market presence in the United States and Canada by 2026 at the latest.

Its absence from the North American market has long been a chink in the armour of PSA, which is financially controlled by China’s Dongfeng brand and includes Citroen and the moribund premium brand DS.

It also includes Germany’s Opel (and its badge-engineered British subsidiary Vauxhall), which it bought from GM in a fire sale late in 2017.

PSA had a sales surge late last year, ending at 3.88 million sales, largely because it had certified all its models for the new Worldwide Light Vehicle Harmonized Test Protocol (WLTP) before any other car maker in Europe.

It has also seen a surge in its SUV sales. While rival Volkswagen was seriously late to the SUV and crossover party, PSA was almost a full generation later again, but they’re rocking now.

The company punched out 265,000 of its 3008 SUVs (pictured) last year, while its 5008 SUV climbed 27 per cent. Its sister brand Citroen sold 123,000 C3 Aircross SUVs last year on debut, while the DS brand continued to underwhelm, with the DS 7 SUV finding 28,000 homes.

But Opel and Vauxhall have a broad range of SUVs, largely engineered with the help of the American technology Peugeot will now return to challenge.

Peugeot is the world’s second-oldest car maker behind Daimler and has been making cars for 130 years. The company has been around since before Napoleon was Emperor of France and developments of the original Peugeot-branded pepper and coffee grinders are still the foodies' choice today.

Peugeot sales had reduced to a trickle by the time the French brand left the US and Canadian markets in 1991, with the recession choking it down to 4292 cars a year earlier.

A lot has changed since then, though. Peugeot staved off collapse in 2013 only via the Peugeot family selling 25.6 percent of its PSA stake to Dongfeng and the French Government.

Dongfeng was Peugeot’s joint-venture partner in China and though PSA sales in the world’s largest car market fell last year, it proved an immensely profitable arrangement until recently.

Its sales in China last year dropped by 32 per cent to just 262,583 cars. Chinese consumers once bought more than 700,000 PSA models a year, and fixing that slide in a slumping overall Chinese market will be hard, despite Tavares’ commitment to it.

It also slumped in the Middle East and Africa (which, bizarrely, is bigger for PSA than China at 291,998 cars) after the US re-imposed sanctions on one of its strongest markets, Iran.

The US market has changed drastically in Peugeot’s absence, losing its status as the biggest car market in the world to China, seeing Chrysler bought out by Daimler and then given away to Fiat to create FCA and then seeing the US Government bail GM out of bankruptcy.

Fellow Frenchie, Renault, isn’t sold in the US either, but its alliance partners, Nissan and Mitsubishi, have strong presences there, with Nissan even boasting US manufacturing capability.

In Peugeot’s favour, the US is also a market in which European and Chinese market bullies, Volkswagen, are also notoriously weak and unable to convince buyers of its “junior premium” status.

Peugeot has pulled its focus down to 15 US states and four provinces in Canada as its preferred starting platforms in North America, and it has been working its way through US homologation procedures for at least two years now.

One of the major steps forward towards Peugeot’s return was the launch of the Free2Move app in mid 2017. Initially based in Seattle, the app makes ride sharing and public-transit services easier to pay for and order. The app is also the base for PSA's car-sharing experiment in Washington, DC, last year.