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Peugeot accelerates plans to re-enter US market

April 5, 2019
Peugeot’s parent company, PSA Group, said the carmaker would begin exporting a selection of models to the U.S. and Canada within three to four years, sooner than a previous timeline of delivering Peugeots to the U.S. by 2026.
The plan follows reports that Fiat Chrysler Automobiles rebuffed an overture from Peugeot to explore a combination between the automakers. Such a deal would turn PSA Group — owner of the Peugeot, Citroën and Opel brands — into a player in the U.S. overnight.
But Carlos Tavares, PSA’s chief executive, said that rather than building a traditional dealer network, Peugeot had identified a "relatively innovative" way of distributing cars that included selling online but that would also allow customers to test-drive its vehicles.
"Because people don’t know our products, they’re not going to buy just based on what they see on the screen," he said.
Tavares said PSA would not build any assembly plants before they could be supported by sales volumes. Vehicles will be imported from PSA factories in Europe "and/or" China, depending on the result of trade negotiations with the Trump administration.
"There won’t be any huge investment on production up front and praying that the business case is good," he said. Nor will PSA invest heavily in building a dealer network, he said. 
"We won’t go conventional on our business model. We have a quite creative and disruptive way of distributing the cars," he said, adding that it was "too soon" to reveal it. "Scalability is the key word," Tavares said. "We’ll take our time, because it’s all about upside. Once we step in, we won’t step out." 
Tavares’s plan to re-enter the U.S. market carries risks. The market is dominated by pickups and large sport-utility vehicles — not the strong suits of Peugeot’s lineup. The U.S. auto market also is past its peak, and well-established global brands including Ford, General Motors, Toyota, Nissan and Volkswagen have competed aggressively in recent years for those declining new-car sales.
 
"The PSA Group," Tavares countered, "has 18 percent of the European market, and the competitors in Europe happen to be the same as I have in the U.S.," adding that "it will take many years before we have market share."
 
 

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