Peugeot Has a Three-Step Plan for the U.S. Market

Peugeot SA Chief Executive Officer Carlos Tavares announced at the Automotive News World Congress in Detroit on Jan.17 that the company plans to return to the U.S. Market after an absence of more than two decades.

The last time Peugeot sold vehicles in the U.S. market was during the waning years of the George H. W. Bush administration. Unable to compete with the mass offerings of affordable compact and midsize vehicles from Japanese car manufacturers, Peugeot left the U.S. market in 1991 and has shown little interest to return, until now.

The company acquired the Opel and Vauxhall sister divisions from General Motors (NYSE:GM) in March 2017 and plans to use technology and engineering expertise of those two divisions to gain entry into the U.S. market. However, U.S. consumers who know and like Peugeot SA’s lineup of vehicles should not rush out for a test drive, as it might be few years before Peugeot, Citroen and DS-branded vehicles are available at your local dealership.

Peugeot’s plan to return to the U.S. market is somewhat unconventional. The first step of the company’s plan is to expand its Free2Move-branded ride sharing service, which currently uses vehicles from other manufacturers. In the second step, Peugeot SA plans to use its own cars – Peugeot, Citroen and DS – to operate the ride service. Finally, in the last step of the plan, the company will introduce for retail sale selected brands and models, which will be designed using the market expertise of former GM engineers and U.S. market experts who worked on the Opel brand.

GM sold Vauxhall-badged vehicles predominantly in the United Kingdom and Opel-badged vehicles in the other European countries. However, some American customers might be familiar with the brands and the technology. Opel and GM’s Saturn brand, which was discontinued in 2009, shared many of the main components, such as the chassis, engines, transmissions, etc.

In addition to the U.S. market expansion plans, Tavares announced the company’s plans to transition most of its production away from internal combustion-powered vehicles. According to Mr. Tavares, “the PSA Group will be 100% electrified” by 2025, which means that vehicles will be powered by fully electric or hybrid powerplants. Additionally, Peugeot is working on significantly automating vehicle operations and plans to have 10% of its vehicles capable of full autonomous driving and 80% of its vehicles fitted with optional features that will allow driver-supervised autonomous operation under certain conditions by 2030.

The PSA Group’s share price rose 23% between mid-January 2017 and the beginning of October 2017, but receded after the October peak and lost almost 12% to close on January 18, 2018, at €18.32, or US$22.43 at the January 18, 2018 exchange rate from XE.com.

Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.