Coming Back to America? PSA Looks West : 1

Part one: Recent reports suggest PSA are considering a return to the US market. Are they out of their minds?

Peugeot had modest US success with the 505 model. Image:productioncars
Peugeot had modest US success with the 505 model. Image:productioncars

If it isn’t chiseled in stone somewhere, it probably should be. Because if you want to make a success of the auto business, you really do need a viable (and profitable) presence in the United States – it’s simply too big, too diverse and too lucrative a market to ignore. Conversely, it’s also amongst the toughest to break into. Casualties are inevitable, even for the more successful entrants; an unintended acceleration issue here, a diesel scandal there, but you only have to track the fortunes of the auto-absentees to understand the price of retrenchment.

You disagree? Well, take Fiat for example. For decades locked into a straitjacket of being a small car specialist heavily dependent on its home market, Fiat consistently failed to develop a profitable base with larger cars. Their specialism meant they were well placed in times of austerity, but made them over-reliant on volume over profit. But had they gone about their late Sixties/early 70s US ambitions with sufficient conviction, they could conceivably have developed a broader model spread, one better able to withstand the night-follows-day cycles of domestic market boom and bust. Only latterly has it seriously diversified into large-scale production of more upmarket cars aimed at the US market, the very survival of Italian volume car manufacturing now resting on its success.

But if it was easy, wouldn’t everyone be doing it? Because it goes without saying that going about it the wrong way is really no better than not going there at all. And if anything, breaking America is more difficult for a ‘volume‘ producer than it is for an upmarket ‘specialist‘. For instance, Renault’s alliance with struggling US carmaker, AMC did neither business much good. Renault lost money and lost focus, eventually cutting its losses and selling out to Chrysler in 1987.

Alfa Romeo limped along until 1995. Citroen haven’t been Stateside since their early-’70s ambitions deflated. The less said about Rover’s Sterling fiasco the better. The roots of failure have tended to lie in poor planning, unsuitable product, a lack of durability and disinterested dealers. Add in distribution issues, parts availability and dealer spread, combined with possibly the most demanding customer base on the planet and failure is the most likely option.

Image:productioncars
Image:productioncars

Of the European marques who packed up and left, Peugeot perhaps have come closest to making a decent stab at the US market. During the 70’s and 80’s its range of conservatively styled, well engineered medium sized saloons and estates appealed to the sort of American buyer who presumably now keeps Subaru in business. Peugeot’s 504 and 505 models were well regarded and proved reasonably durable in a country where extremes of climate are the norm and the idea of preventative maintenance is often rather loosely applied.

But one senses PSA’s heart really wasn’t in it and by 1991 with only the shoddily-built 405 to offer, sales plummeted and after 33 years, Peugeot slunk away from the land of the free with an almost palpable sigh of relief. With sales elsewhere easier to win, PSA has subsequently grown its business interests in regions as far afield as Latin America, India and most significantly of late, China. But time and geopolitics wait for no man so on one hand facing a potentially catastrophic contraction in China and a reawakened market in Iran, PSA’s Carlos Tavares is reported to be casting his eyes West again in the hope of finding a more stable berth for his ‘Back in the Race’ ambitions. Can he really be serious?

Author: Eóin Doyle

Founding Editor. Content Provider.

5 thoughts on “Coming Back to America? PSA Looks West : 1”

  1. If Peugeot make the leap across the pond, their quality will need to take a commensurate leap forward. This is a market where perceptions are forged in the crucible of umpteen customer satisfaction surveys and a rabid media looking for easy stories. That said, Peugeot’s range is as good as it has been in quite a while; God help them if they launched into the US during their “creatures from the deep” styling phase. One also wonders whether Peugeot will pioneer their “Just Add Fuel” programme over there, removing one of the bars to acceptance (fear of being lumbered with a poorly built car) and giving them a genuine USP in a market that will be indifferent at best.

    1. I’d agree. What has Peugeot got that Kia and Hyundai don’t? Answer: look under your pillow.
      The Accord and Camry would wipe the floor with the 508. The Ceed will eat the 308.
      Eoin: are Americans careless with servicing?

  2. The 504 and 505 were regarded as comparable to Volvos and Saabs, maybe even BMW and a bit below Mercedes. That made them a realistic proposition in USA in the 70s and 80s; I don’t think Peugeot has anything meaningful to offer now, in fact it’s hard to know what Peugeot even means now. I was a big fan and we had at various times a 104, a 305 estate and a 505 estate but now it seems a brand that has neither the funkiness of Citroen nor the bourgeois solidity of its past. I can only agree with the previous comments.

  3. Tavarez say that PSA will start reentering the US-market in 2017 by renting some Meharis. And after this blockbusting success (any doubts?) PSA will begin to introduce their complete model range in the States.

    I hope for them, a lot of Hillbillies are dreaming of owning a Peugeot 108 or some urban hipsters want to drive in their C4 through the streets of Los Angeles…

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