Peugeot was in the US for years with marginal sales when it pulled the plug in 1991. Now the French automaker has announced it is returning to the US by 2023. There are numerous question marks and pushed-off plans that are yet to be addressed. The COVID-19 crisis has definitely been one of the reasons for the delay. But also because Peugeot says it wants to develop a better online retail environment.
North American CEO Larry Dominique says Peugeot will use franchise dealers like most other manufacturers. But he said in an address to the Center for Automotive Research buyers don’t rate traditional automotive retailing especially high. He says surveys show buyers like buying through the internet.
Peugeot thinks that traditional retail stores are becoming obsolete in the US
Interestingly, he says that the internet sales result in zero margins for dealers were it not for incentives manufacturers add to new car sales. Once those are computed into the sale retailers see about a 2.3 % margin. Now Peugeot thinks that traditional retail stores are becoming obsolete. “To this day we’re still building huge dealerships costing tens of millions of dollars exacerbating the very fixed cost absorption model existing today,” he says.
This is happening “at a time when our research tells us consumers are looking for a simpler, more efficient process, our retail structure defaults to spending money on fountains and Taj Mahals — a good example of disconnect or lack of reality if you ask me.” It’s obvious that Peugeot is looking for atripped down dealerships. But will consumers feel that Peugeot is real without the solid feel of marble floors and expansive offices of a dealership?
Peugeot now is focusing on Washington D.C. as a test lab
Peugeot announced three years ago about its intention to return to the US. It plans to do it in three phases. The first phase is to offer mobility services, then mobility services with Peugeot vehicles, then retail sales. Its plan is called “Push to Pass.” Peugeot recently sold its Free2Move mobility app. This app allowed the user to book a wide variety of different vehicles and do it within the app. Peugeot now is focusing on Washington D.C. as a test lab of sorts for its mobility efforts.
What’s odd about this move is that parent group PSA is in negotiations to merge with Fiat Chrysler in the first part of 2021. The Fiat Chrysler network is the perfect platform to add Peugeot, Citroen, and other PSA brands. That, or rebadge them as Dodge or Chrysler models.
Really no comment about Peugeot’s plans versus the PSA/Fiat Chrysler merger
Either way, the light at the end of the tunnel is getting brighter and larger. Dominique’s only comment was, “You may have your own opinions of the name but it’s clearly unique and represents a modern, less legacy-minded (entity) than individual existing names. I mean, after all, compared to PSA-FCA, or FCA-PSA, “Stellantis” sounds pretty good to me.”
In all Peugeot is looking into covering 15 states at first. These include Arizona, California, Florida, Georgia, Illinois, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Texas, Virginia, and Washington – for its U.S. return.