Theme : Compromise – The Crucial Balance

As Mr Editor Kearne said in his introduction to this month’s theme, compromise is inevitable in the motor industry. The trick is knowing where to apply it and where to not.

Coherent : Peugeot 403
Coherent and Cohesive : Peugeot 403

Ask any industry accountant and they will tell you that making cars and making money aren’t natural bedfellows. Margins are often small, the customer base fickle and, with relatively long development and production runs, like an oil tanker, once committed you don’t change direction easily. Of course there are exceptions, companies who through a combination of prudence, intelligence, excellence or maybe just fashion, are able to make a healthy profit, year after year, and even swallow up a few of the lacklustre performers in one or more of the above categories whilst they do.

In a recent article in The Automobile, the highly respected motoring polymath Karl Ludvigsen describes Peugeot in passing as ‘one of the world’s most fastidious car makers’.  Much younger readers might find his words a complete surprise and for older ones they will be a reminder of how far that company has fallen, for he was not, of course, referring to 21st Century Peugeot. However that is a fair description of Peugeot before they lost their way. Beneath their conservative skins, their engineering had integrity, they didn’t just aim to match what their competitors were offering, getting away with as little as they could. Yet what made them really special is that, unlike another ‘fastidious’ maker, Lancia, Peugeot were also financially astute. They made decent money.

Back in the Sixties and Seventies, to have called Peugeot ‘The French Mercedes’ would not have been fanciful, though arguably it might have been rather underestimating them. For Peugeot were making quality engineering available at far more affordable prices than Mercedes and, in many cases, in cars that were nicer to drive – even in the rudimentary world of diesel engines, a Peugeot 404 Diesel was far preferable to the leaden Mercedes 180D and its immediate successors. And these weren’t just cars for French doctors to drive on short trips between villages, with a local mécanicien readily available to tinker with it should something go wrong. They were cars that sold and sold in Africa because they could be trusted to keep on running. I remember a 404 that my parents hired in 1964. At a glance, it was familiar to me, with a similar Pininfarina styled look shared with my mother’s old Wolseley. But whereas that BMC car had discredited itself once too often the year before, wheezing itself to a halt half way up a Devonshire hill, the Peugeot just let you know that it was solid. From the threaded rack fittings built into the roof, down to its bolt on hubcaps, you knew it wouldn’t let you down.

504 in Africa - image : 504.org
504 in Africa – image : 504.org

Peugeot really were the finest advertisement for French bourgeois values, and you can imagine that there was a fair amount of understandable self-satisfaction in the stiff-suited Sochaux boardroom when, in 1975, they took full control of Citroën. It must have seemed the victory of pragmatic integrity over high-minded, uncompromising idealism. So what went wrong?

As Western workforces became more expectant of a decent income and decent labour conditions, the cost of production rose. Yet the same people, as consumers, did not expect to pay more for their cars. And so, inevitably, corners were cut. For many years it seemed that, of the French manufacturers, Peugeot knew exactly which corners to cut, and which to stick to. This was a matter of intelligent compromise. So when my Mum got a 504 Estate in 1972, the engineering integrity remained. But engineering is not the same as manufacture and, excellent though that capacious Peugeot was, it wasn’t flawless. Bits of trim came loose and you could see where Peugeot’s accountants, always lurking in the background, were making sure that the books stayed well in the black. Yet it was a totally acceptable compromise because the rest of the car was worth it and, to put it into a financial context, comparing UK imports pre EEC, in 1972 an Opel Record, a very unambitious car, sold for £1,530, just £79 more bought you a Peugeot 504 and you’d have to pay £1,000 on top of the Peugeot’s price to get an entry-level Mercedes 220.

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Jump another 12 years to 1984 and I am sitting in my three year old 305 Estate at traffic lights between Kentish Town and Camden Town. They turn green and I move off, make to change from first to second and find myself coasting in neutral holding a gearstick in my hand, totally free of the car to which it once belonged. Two years after that, at around 70,000 miles, with the fabric of both driver’s and passenger’s seats worn through to the underlying foam in places, I loaded the car one day and its rear suspension just kept sagging until the silencer touched the road. Welcome to the unacceptable compromise.

Image : oldcarmanualproject.com
Image : oldcarmanualproject.com

Much of that 305 could be traced back to the 1965 204, Peugeot’s first post-war entry into the smaller car market.  With distinctive and tidy Pininfarina styling, an aluminium OHC transverse engine with gearbox in sump, independent rear suspension and front disc brakes it was universally praised. But, in a more cost-critical sector, Peugeot would have struggled, not to make a good car, but to make an competitively priced one.  They were helped to some degree by national character since, unlike its exact contemporary, the conceptually similar and also admirable Triumph 1300, its home grown market did not demand grand timber trim and deep carpets. Inside, like many French cars of the time, it was comfortable but austere, a criticism that worked against it more in the UK than in France where it became a big seller. But as the 204 was supplemented by the 304 on the same base, and the 304 was replaced by the 305, Peugeot would have been aware that, for many customers at that level, fastidious engineering did not command a premium. Yet, for a company that once refused to buy in shock absorbers since outside manufacturers could not achieve the valving specifications  they required, they were not going to skimp on mechanical specification. It’s obvious that savings could only be achieved elsewhere.

204 Cabriolet features Peugeot's traditional comfortably but unadorned interior.
204 Cabriolet features Peugeot’s traditional comfortable but unadorned interior.

I claim no prescience here. At the time I didn’t view my bad experience as a sign of Peugeot’s long and uneven decline. Indeed, I still came away with good memories of that car’s basic abilities and Peugeot were still to excel in the future on certain levels with certain models. We even bought another Peugeot, a 405, for work, which seemed a bit more robust, and I recommended a 306 to my Mum to replace a Golf. Unfortunately she accepted my recommendation and, even allowing for a mother’s rosy view of her offspring, I don’t think she has ever considered my views on the world of motoring seriously since. Because, although that car was all the things in the ride and handling department that magazine journalists promised, my Mum also viewed it as essentially rattly, insubstantial and unrewarding; and I can’t really differ from her opinion. Corners had been cut and she didn’t enjoy the compromise one bit.

It’s hard to chart Peugeot’s fall from grace chronologically.  Admittedly they reacted badly to it and went through a particularly dire period of styling which might have been avoided. But much of it was possibly inevitable and outside their control. Maybe fastidiousness under the skin just isn’t appreciated any more and the world of old-school Peugeot has been turned inside out.  Fastidious co-ordination of interior plastics and fastidious cross-stitching of upholstery is what sells now.  Today no everyday car is going to dump you into the ditch, unless you are very silly or unlucky, so however much engineering you throw at it, your car is never going to rise that far above the rest.  Peugeot’s former correct but austere bourgeois values belong to a lost age. So why bother?

Peugeot 308 in advertiser's typical sterile backdrop.
New Peugeot 308, grey sky and concrete.

I looked at a new 308 the other day. Compared with its immediate predecessor it is a more attractive proposition and I’m sure I’d be happy to rent one. But, were Mrs Patrick still in the market for a new car, despite Peugeot UK describing it portentously as ‘The Ultimate Hatchback’ I can’t think of a single thing that makes it special. If it cost £79 more than the equivalent Opel, which would I suggest she bought? Avoidable or not, Peugeot lost that sweet spot of compromise and will probably never find it again.

18 thoughts on “Theme : Compromise – The Crucial Balance”

  1. Maybe i am regarding Peugeot through rose-tinted glasses, but i think Sochaux is able to built attractive and solid cars. Last week i was sitting in a 308 in GT-line spec and in a 3008 and both, especially the 3008, seemed to be very, very well screwed together. Much better than any Opel or Ford.
    And they are not involved in the Dieselgate-affair at all and they have a very modern new small petrol-engine and clean diesel-cars.

    The PSA-problem is, when you think of a solid car with a reasonnable price-tag, most people would think of a Hyundai or Kia, or a Skoda. Not many would name Peugeot, and no one Citroen or their new brand…
    Well, you could fill this gap with emotional cars, but not by stop selling cars like the RCZ, the cabriolets and any interesting technical solution.

    1. Exactly, Markus. Kia and Hyundai have crept into the middle market and without any drama become a good solid pair of brands. The Kia Stinger might very likely do a lot better than the Alfa Romeo Giulia.
      Peugeot managed several correctly compromised cars after the 305, did they not? The 205 and 206, 406 and even 407 to judge by the numbers sold. Can I suggest it’s a genertional thing? The values of managers who are now 40- something are not the one needed for sobriety and balance. Peugeot’s problem is a manifestation of a greater change in society.

    2. I’m always dubious of the term “clean diesel” and especially so after proof they never were!

  2. I had my slice of misery owning a 307. Took it to a dealer for the 75,000km service and got a £ 1,800 bill (R$ 6,000 in 2011 money). Couldn’t take the car to an independent mechanic as in Brazil there are virtually no OEM-level alternative parts for PSA products. The icing on the cake was to return twice, until they finally sort out the oil pressure problems the car did not have until the service.

    Although the 1007 and the first 3008 were interesting cars, my personal experience with Peugeot is enough to steer away from any PSA offerings.

  3. That article was a great illustration of how brand identity can be lost; from being lauded for the quality of engineering and design to what…..? I had a great fondness for Peugeot but after owning three I doubt if I will be back. We bought a 104SL influenced by the Peugeot reputation and kind words in Car magazine. The 104 was nippy,
    very comfortable and apart from terrible cold weather starting, was quite reliable. It did however rust everywhere including the roof. The 305 estate that followed was hopeless with intractable cooling problems and seat covers that after three years were worn very thin. A bigger family meant a 505 Familiale estate. We loved it at first; the room, the styling, the diesel engine but eventually the problems came. I think it was a combination of manufacture and uninterested dealer but cylinder head gasket problems, oil leaks and a ventilation system that only gave warm air led to disillusion. It was replaced by an Isuzu Trooper was was faultless over five years. The 505 however was the easiest car to trade. Several people put notes on the windscreen wanting to buy it and the Isuzu dealer had a customer waiting; I still saw it on the road years later, at least fifteen years old. Maybe I was too hasty.

    I love the inclusion of the adverts and it’s interesting to see the amount of technical information given, including bore and stroke. Were we more intelligent then or was everyone expected to have a reasonable understanding of engineering? The ad for the 204 reminds me of how much I would like a 204 cabriolet but I am sure that heartache would follow.

    1. Barry. The 305 seat covers really were inexcusably flimsy, weren’t they. For me the 305 was second best – I had lusted after (but couldn’t afford) a 505 Break when they were new. Did anyone else ever actually lust after one?

      As for the ads, I suppose we needed to be a bit more knowledgeable back then, bearing in mind the likelihood of having to do roadside repairs. But it’s more likely a case of both flattering and bemusing their clientele into submission with spurious specification details.

      Looking back I realise that Car’s kind words about certain vehicles (as well as their snide words about others) have cost my family a lot of money.

    2. I actually did lust after 505s several times – though, very untypically for me, it would have been a saloon and not an estate, high spec, please. I remember a pale green metallic 1st series 505 of a classmate’s parents. I found it strangely appealing with its coarse, brownish seat fabric. They drove that car far into the nineties.

      The 505 is really the ultimate classic Peugeot (and also the last RWD one), and that it’s a bit eclipsed by the 504 even makes it more interesting for me.

      In hindsight, this is also the last time when a Peugeot was technically very different from the equivalent Citroën. It all started to go downwards after that – for both marques.

  4. Simon: the V6 406 is a better car in every respect. The early 505’s are good though; late ones simply nasty inside. There is a lot to be said for the 607 and stuff the press’s view.

  5. The 403 is a fine choice of header picture. It’s one of a trio of medium size mid-1950s saloons from relatively small European regional carmakers which defined the characteristics of the mid-size premium car, which are still recognisable over 60 years later; subtly advanced engineering, a good driver and passenger experience, elegant but restrained styling, and discernibly superior material and build quality.

    The other two are the 1954 Borgward Isabella and the 1956 Volvo Amazon. Of the three, I think the Peugeot is the most accomplished. Also, to Peugeot’s credit, they realised that the 403 would not be immortal, and had its eventual replacement, the 404, in place by 1960. Had it not been for the 1961 unpleasantness, Borgward would have had the new Isabella in production long before the Volvo 144 arrived in 1966.

    Other pretenders to the mid-’50s premium throne:

    1953-on Wolseley 4/44 and MG Magnette ZA / ZB. Gerald Palmer’s ‘BMC Jaguar’ showed great promise, but were under-developed and under-capitalised. That man Lord again. His priorities were elsewhere, probably rightly.

    Alfa Romeo Giulietta 750. I’d exclude it because it’s a bit too small. The Peugeot, Borgward, and Volvo are within millimetres of each other.

    Mercedes Benz W120. Too big, too slow, too expensive.

    Lancia: Why, oh why did they not replace the Aprilia, leaving a gap between the Appia and Aurelia which wasn’t filled until the Flavia arrived in 1961?

  6. They always sold themselves too cheap. Closer to Opel and Ford than Mercedes-Benz.

    It’s a characteristic shared with Lyons-era Jaguar: they couldn’t sort out the quality, so sold on price. Carl, for the most part, achieved acceptable quality by the standards of the time, but an over-ambitious development programme in the late ’50s was the main reason for the 1961 Untergang. Of all his motor industry contemporaries, Carl Borgward was possibly closest to Bill Lyons, with bits of William Morris, Soichiro Honda, and Eduardo Barrieros thrown in.

    This explained to a certain extent why the rest of the German industry was not particularly well-disposed towards Borgward’s survival. Carl also tended to use his Mittelstand suppliers as a source of medium-term finance; he was certainly not unique in this within the industry, but it didn’t help his case.

  7. The problem is the difference between real and perceived quality, or rather the lack of difference. Before, there really was a difference. When you paid a premium, you got a premium product. A Mercedes or Porsche was built to a higher standard than lesser marques. Today, that difference is no more. A Mercedes is built to the same standard as a Hyundai, and looks like it as well. The premium is all vaporware, it’s brand cachet without the real quality. It’s all about the brand and has nothing to do with the product.

    Peugeot did the same as Mercedes, only on a lesser scale. A slight premium in price for a slightly more premium product. Today, nobody is interested in paying for that higher quality, the punters are more interested to pay more for a better brand. Where is the market for quality products, when the only thing people are interested in is the brand cachet of an Audi, BMW, or Mercedes? For the same money, they can have a smaller car from a premium brand. The difference is they don’t get a premium product anymore, they’re only paying for the brand.

    Peugeot is caught between value for money and the premium brands pushing downwards. Which means Peugeot can only compete on price or size. For the Volkswagen buyer interested in size, there is Skoda for the same money. A larger Skoda or a smaller VW. A larger Peugeot or a smaller Audi. Peuegot seems lost between those worlds, and they don’t seem to offer anything they do better than the competition for the same money. And nobody is interested to pay a premium for their products anymore, because they lack both real and perceived quality. What reallt is a Peugeot anyway these days? Why would anyone buy one over any of the competition?

    1. The maxim goes that a reputation is hard to get, easy to lose. But is it? In the public eye, VW still remains that quality cut above the others that you mention. And, undeserved though it may be, it still works. Peugeot might get praised with achieving ‘Golf like quality’ but, really, it should have been the other way round. Had Peugeot not succumbed to the quality compromises it did (from the early 70s on in hindsight) it could have had that semi-premium reputation, retained it and been the yardstick for poor old VW and the rest to always try to measure up to. It certainly had the right basic products.

  8. I can immediately think of a single thing that makes the 308 special – the Puretech 130 engine. Having recently purchased one so equipped I am astounded that an engine of its size can have such a phenomenal torque spread accompanied by a reassuring three cylinder throb that was thankfully not engineered out. Whilst the rest of the car is just Peugeot’s way of showing the world that it could build a Golf, that delightful engine is worth the price of admission alone.

    1. Despite what I’ve written above, I should recant enough to agree with you Simon. I’ve not experienced it first hand yet, but from what I’ve read the Puretech is a very good engine – characterful, yet not overstressed. All the more welcome since it puts another boot into the long-term French obsession with diesel that we unfortunately imported so wholeheartedly into the UK.

    2. The puretech engine was the last and best reason for a female friend of mine to buy a Peugeot 2008. This relaxing and frugal engine is so easy to drive with that lot of torque the 2008 is now their car for all affairs. A single reproach can be made, it has no fine sound. Most of the time you did not hear him, and you are glad not to hear him.

      It is a shame, PSA did not install this engine in more cars. I cannot understand, why they are not offering a C3, a C4 Cactus or a Peugeot 508 with the Puretech 130 engine. Or a C1 or 108 with a Puretech turbo engine (Puretech 110 would be more than enough).

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