First the world, then the U.S.

From autonewseurope.com (http://www.autonewseurope.com/2001frankfurt/peugeot917.htm):
Peugeot: First the world, then the U.S.

Lindsay Chappell
Automotive News

The likelihood of France's Peugeot Group re-entering the U.S. market after a decade-long absence depends on the answer to two questions:

Can the French automaker maintain the sales growth it is seeing in Europe and other markets worldwide?

And if so, will it want to divert enough cars to mount a U.S. sales initiative?

PSA/Peugeot Citroen SA says it will decide whether to return to U.S. retailing after 2004. That is the end of the automaker's current global business plan.

According to that plan, PSA expects to reach a worldwide sales volume of 3.5 million vehicles. That would translate to 700,000 more vehicles than the automaker sold last year.

"Our biggest concern at the moment is the European market outside of France," said Frederic Saint-Geours, Automobiles Peugeot managing director, in a private discussion last week at the Frankfurt auto show.

"Although sales in those European markets are growing, they are not growing as fast as in France." For the first half of this year, for example, while PSA sales in France ticked up nearly 7 percent, sales in Germany were flat while sales in the United Kingdom rose a modest 4.3 percent.

But it is Peugeot's outlook on new markets that is triggering the conversation of a U.S. entry. Sales outside Europe are running more than 20 percent higher than last year. Peugeot has been a small player in Latin America, Asia and other markets. The company is ramping up a retail network in Mexico.

"We have a plan through 2004 to reach our goals with our present selection of models," Saint-Geours said.

"We want to expand our business in China, Iran, South America and Mexico. It will be only when we have done so that we will begin to look beyond our existing markets and make the decision on the United States."

Saint-Geours said Peugeot has not decided what models might be offered to U.S. consumers. "By 2005," he said, "there will be new models."

Under the world plan, 85 percent of Peugeot's sales will come from three platforms - the new 307, sized to compete against the Ford Focus; the 206, which shares a class with the Ford Fiesta and the Opel Corsa from General Motors; and the 106 minicar.

There are no plans to introduce a light-duty truck and no plans for any alliance with other automakers, such as French competitor Renault's pairing with Nissan Motor Co.

I think Peugeot would do well in America's compact car market. :D

What makes you think they'll do well here? They've got a bad reputation in the US for over-priced cars. Salesmen, and especially Peugeot executives, believed that their cars deserved a premium price because they were Peugeots. Nobody understood that the American public doesn't understand that Peugeot's history goes back to the beginnings of the auto industry...nor would that make a difference. Americans need luxury items for "perceived value" in an near-luxury car, which is where Peugoet was positioned here.

In order to do well here, they'd have to market themselves better with more competitive pricing and better equipment levels and quality.

Anything smaller than the 406 would be a waste of time in the US. They should bring over the 406 and the 607 (or their replacements). Maybe even a Citroen model or two.

Originally posted by Hudson
Anything smaller than the 406 would be a waste of time in the US. They should bring over the 406 and the 607 (or their replacements). Maybe even a Citroen model or two.

Sorry, but I beg to differ on this...the 106 is obviously a waste of time, but the 206 and 306 both have a chance, IMO. Look at the success of the Toyota Echo. If Peugeot could offer those cars at competitive prices, it would offer buyers in the sub-compact market who are considering an Echo a better looking (IMO, again) car that would also be a little more distinctive.

Forget their history. I think people want more car for the money these days and their history is not doing the average consumer any good with savings. I'm still looking for a 1990 405. Back then when I wanted one it was about $21,000 and I really could not afford one straight of college. That was a lot for a car that size but now I could probably get one for a bargain IF I could find one.

Originally posted by Heep


Sorry, but I beg to differ on this...the 106 is obviously a waste of time, but the 206 and 306 both have a chance, IMO. Look at the success of the Toyota Echo. If Peugeot could offer those cars at competitive prices, it would offer buyers in the sub-compact market who are considering an Echo a better looking (IMO, again) car that would also be a little more distinctive.

Yes, let's look at the "success" of the Echo. The well-established Toyota brand is on pace to sell 44,000 Echos in the US. While this may seem like a good number, it's being outsold by the Kia Rio and Sephia and Hyundai Accent. With 44,000 units spread across 1,196 dealers, this means that each dealer is only selling three Echos per month. With a car that has such little profit potential, what's point of competing in this market?

And do you really think a Peugeot could be introduced into the US with a base price of under $12k? When European brands want to move upscale of their Asian counterparts, undercutting the least expensive European import by more than $3,000 doesn't seem in the cards.

If Peugeot's serious about coming to the US, they have to hit the heart of the market...where the profits are. The least expensive model should be around $20k (406/407). They should also bring in the 607 at just shy of $30k and perhaps the planned SUV. I'd rather seem them bring in the C5 and C6, but those wouldn't be enough to sustain Citroen as a brand and they don't have anything planned to properly market in the US.

just read your message Hudson:Anyway you saying the 607 could scrape in at under $30K is a little too optimistic, you see over here in NZ a 607 V6 SE fully loaded set me back over US$40k and even then this is cheaper than what the car costs in France, but are you meaning the 2.0L version???? A 406 2.0 could slot in nicely at $18k with the V6 at about $20k then upwards we have the 406 Coupe at $30k, with the 2.0 307 XS Premium (Packed to the gills with equipment) at $14k, with the 206 just shy of $10k, an 806 replacement, which I reckon would get a majority of the sales should cost similar to a Town & Country.

And there you have it a Perfect lineup for the US, although these prices may seem a little high compared to say Honda and Toyota, we must take into account the high equipment levels of Peugeot cars.

Bringing in the 106 and any Citroen would be a waste of time

Originally posted by Jimmy_11_cars
just read your message Hudson:Anyway you saying the 607 could scrape in at under $30K is a little too optimistic, you see over here in NZ a 607 V6 SE fully loaded set me back over US$40k and even then this is cheaper than what the car costs in France, but are you meaning the 2.0L version???? A 406 2.0 could slot in nicely at $18k with the V6 at about $20k then upwards we have the 406 Coupe at $30k, with the 2.0 307 XS Premium (Packed to the gills with equipment) at $14k, with the 206 just shy of $10k, an 806 replacement, which I reckon would get a majority of the sales should cost similar to a Town & Country.

And there you have it a Perfect lineup for the US, although these prices may seem a little high compared to say Honda and Toyota, we must take into account the high equipment levels of Peugeot cars.

Bringing in the 106 and any Citroen would be a waste of time

Here are my thoughts:

A major marketing push would be needed BEFORE Peugeot re-entered the US market. If the public's perception of Peugeot could be changed for the better (and quality were on par with BMW/Mercedes-Benz and close to Lexus), then...

The 607 would have to come to the US at under $40k..with a V6. Selling it with anything less than the V6 would be a waste of time here. Only Saab gets away with four-cylinder sales in that price range.

The 406 (or future replacement) could only be sold in the $20-30k range...anything more would be a mistake. As much as I love the 406 coupe, it would be a hard sell here in the $30K+ range. You're competing with the rare C70 around $40k. Volumes for a $30k coupe would be sparse.

The next 807 would have to be considerably larger to even THINK of selling it in the US. A V6 would be a minimum and 5 meter length is about right, and it'll have to be a bit wider than the current 806. Also, a selling price of not more than $28-33k would be a must.

Peugeot would have trouble bringing the 206 and/or the 307 into the US at under $15k..and probably shouldn't try if they're going to market the $40k 607 in the same showroom.

As for Citroen, there's actually a better chance of launching that brand here than Peugeot. Novelty would win converts from the near-luxury crowd. The C6 would have to come in below $40k and and the C5 should aim for the $30k range. Same problem hits the Evasion as does the 806/807...too small. And the Picasso MIGHT be a hit if sold under $25k. The only way the C3 could make it here is if, somehow, you could market it as a retro-throwback to the 2CV...and price it under $20k.

Re Citroen: Hudson, you made an excellent point, Citroen actually would be an excellent brand to bring to the US, provided the quality of the C5 is on par with the 97+ Xantia and the C6 is much better than the terrible XM, the new C3 could make it to the US for around about $13k (It's expected price when it makes it to NZ in March) all you would have to tell the gullable American public it is the "New 2CV" and the orders will flood in, the Xsara is another car you could market, as a stylish alternative to the Civic and Corolla, in NZ the Xsara also undercuts those two cars in price and the Picasso would be a good idea, following in the footsteps of the PT Cruiser, the Saxo and Evasion however would be a waste of time, because when these were sold in NZ, they struggled to sell, and were eventually pulled from the market.

HOWEVER before these brands come to the US, I think the French should bring in the Renault brand, simply because the quality of this brands cars is unbeatable, basically they should bring in the Clio at $10k (Very possible) with the Clio Sport 172 at $13k, then the Megane at the same price, with the convertable at about the price of a V6 Mustang, then up the scale they have the very hi-tec Laguna II at $25k, which will sell well among the techno-files and Passat + 3-series buyers wanting a little more safety (98% overall in the Euro-NCAP) then we have the Scenic, which would be similar priced to the PT Cruiser, with the RX4 a little more expensive, then we have the Grand Espace, similar price to what else but the Grand Voyager:D and then topping it off with the Avantime luxury car, which should have the class-leading build quality of the Safrane, in at $40k.

There's no point to bringing Renault back to the States, and there are good reasons against doing it.

First, Renault holds a substantial portion of Nissan, who is well established in the US. Nissan produces vehicles in three plants, soon to be four. They sell more vehicles in the US in one year than Renault ever imagined doing. Bringing Renault here would step on Nissan/Infiniti's position in the market. Not a good thing when you own 37-44% of the company.

Second, Renault has an awful reputation in the US. The last products sold here with Renault badges were the Renault Medallion (Renault 21), Renault Alliance (Renault 9), and Renault Encore (Renault 11). The Alliance was a hit when it was introduced, partially due to its position as an American-built car (it and the Encore were produced in Kenosha, Wisconsin) and being named Motor Trend's Car of the Year in 1983. They even marketed the least-expensive convertible, an Alliance convertible, for a few years. But ask any mechanic about Renault and they'll tell you stories of working on Renault Fuegos or 18s. Even the Eagle Premier/Dodge Monaco, a rebadged and slightly restyled Renault 25, carried Renault's reputation through the mud for a few more years.

Peugeot holds a place in many hearts of the rich and near-rich. Peugeot 505 wagons littered the driveways of many of the nicer homes of America for years. Until the arrival of BMW wagons (and the plague known as the SUV), Peugeot wagons probably came in second in prestige behind the Mercedes-Benz wagon.

Citroens haven't been officially on sale in the US since the mid-1970s. The attempt to bring them here in the 1980s and 1990s was a failure of an underfunded import company. They sold a few CXs in the 1980s, but only about 7 (literally, 7) XMs were sold in the US from 1991 to 1993.

As you mentioned, QUALITY is the most important point. For Peugoet or Citroen to return to the US, they would have to be on par with the Germans and within strking distance of the Japanese just to be considered by the US buying public.

That...and a dealer network that doesn't treat its customers as if they were morons.

Renault should still bring the Grand Espace in badged as a Nissan Quest, once his alliance with mercury dies, basically because the latest one is useless

I saw a 406 estate on the New Jersey turnpike once :D

personally I think that they can do well here if the market correctly
personally I would buy a 206

but those prices listed would be a little low b/c you forget the US gov makes foregin cars(not made in the US maybe foregin car here now have plants in the USA) hard to sell here b/c of high import taxes

Imported cars are not all that hard to sell here. The federal government imposes a 2.5% import tariff on cars. It's not all that steep. It IS quite difficult to sell an imported TRUCK here; the tariff there is 25%.

The MCC Smart will be import in the US at the price of 15 000 Euros/US$. I don't know if DaimlerChrysler will succeed, but it was just to say that little cars (and the Smart is very little !) have maybe a chance (Renault Twingo, future Peugeot 107).
Why do you say that the 206 or 307 wouldn't be saled ? Look the VW Golf (and its prices), it is the size of a 307. And the 206 could be sold as a sport car (WRC Rallyes) selling the S16, RC 180 hp or Roland Garros. The 407 (Coupé, SW and Sedan), 607 and 807 have their chances compared to Passat, 300M, or Trans Sport.
The real problem (to me) is that PSA have to invest in an infrastructure if they want succeed. About the cars, it's not a problem today as in the 80's when french cars were expensive and bad lowded : in Europe, 26% of cars are french, so if Italians, Germans, Englishs, or Spanish like these cars, why not the Americans ?!! ;)

As far as Citroën is concerned, don't forget the Picasso wihch would be a good competitor to the nice PT Cruiser. The C3 and C6 have their chances as the new 2CV and new DS. But we have to wait the big restyling of the too classic C5.
And Renault has interressant models : Clio V6, Avantime, Vel Satis, Twingo, Mégane II, Espace IV (I love it !), Scénic RX4, etc. But they have to overpass their bad reputation in the USA.

Originally posted by Stefanel1
if Italians, Germans, Englishs, or Spanish like these cars, why not the Americans ?!! ;)

due mto high fuel prices and good fuel- Europeans need an economical car- plus you lot aren't the biggest peope- in the US however- they demand space and they have cheap and crude fuel and it is cheap:)

Do you know that Smart will be sold in the US (especially to NY and SF) at about US$15 000 ? So, as the room in cars is concerned, it's the contrary ! Even a Twingo (which is the smaller french car is bigger with 5 places, 2 places for the Smart).

The Twingo :

That's true that Europeans need smaller cars than in the USA, because roads are smaller, and they don't want to use too much gas. More, there is a mode effect : Europeans like small cars.
But, the french makers product big cars too.
Vel Satis, C6 and 607 are bigger than a 5 series.
You've 3 other models as big as a Passat
3 other as big as a Golf.
And more, 3 Vans as big as the Town and Country for example.
You can add 2 "compact vans" like the PT Cruiser.
All these cars are big enough for the Americans and they can take advantage of their (relatively) low gas consumption, good handling and comfort.
And if they want, these makers can add their small cars (Smart do it !).
I'm still thinking the problem doesn't come from the cars but from the image of the three makes in North America and from the money that the companies have to invest there.

There are some Smart already in "Dark Angel" ;)