Category: Automotive

Peugeot Automotive

French car brand Peugeot will be making a return to the North American market, parent Groupe PSA announced Tuesday morning, though the exact timing of the relaunch is uncertain and could be pushed out as late as 2026.

Peugeot was one of a number of European brands that pulled out of the American market during a severe industry downturn in the early 1990s, a list that included Fiat before it bought Chrysler and French rival Peugeot. The parent company has been exploring ways to return for several years and has already launched several mobility services ventures in the U.S. Groupe PSA had been exploring which of its various marques would spearhead its return and has settled on the flagship Peugeot.

“This is another step in a multi-step return to the market,” Groupe PSA North America CEO Larry Dominique said in an interview with CNBC.

The exact timing for relaunching Peugeot in the U.S. has yet to be determined, Dominique, a former Nissan executive, emphasized, noting that it could stretch out as late as 2026 though it will more likely happen sooner.

“This is not about speed. It's about getting things right,” Dominique said. “The good news for us is PSA is not dependent on me to sell a single car. The idea is to build the brand the right way.”

The roots of Groupe PSA stretch back 208 years and the company today has operations in a variety of fields, including culinary goods, watches and bicycles, though automobiles constitute the largest source of its 74 billion euros in revenue in 2018.

Groupe PSA sold 4.1 million vehicles in 2018, a 3.8 percent decline, according to the Global Auto Database, positioning it as the world's ninth largest automotive group. The numbers include not only the group's largest brand, Peugeot, but also Citroen, DS and Opel/Vauxhall — the latter purchased from General Motors which has exited the European market.

The Paris-based company first signaled plans to return to the U.S. in April 2016, announcing that it would begin a decade-long effort to begin with a push into mobility services. It said it could take several more years to determine which of the various group car brands would then be re-launched in North America.

Several mobility service ventures are already in operation, including the Free2Move Carsharing service launched in Washington, D.C. late last year. The goal is to roll that out in major cities across the U.S. and Canada over the next few years.

For the time being Free2Go is offering two Chevrolet products, the Chevrolet Equinox SUV and Chevy Cruze sedan, but the goal is to add Peugeot products over the next few years. That is likely to happen even before PSA re-launches its retail sales network, Dominique previously told CNBC, and would serve as a way to gauge consumer reaction to its products.

PSA also is rolling out a service that will allow users of its Free2Move smartphone app to schedule multi-modal travel – everything from bicycle rentals to train tickets and car-sharing. And the group now operates parking service at airports in Los Angeles and other cities allowing customers to rent out their own vehicles while traveling, something known as a peer-to-peer car-sharing service.

Those operations aim to take advantage of what many analysts see as a dramatic shift in personal transportation likely to take place over the coming decade, some experts predicting that millions of Americans may abandon personal vehicle ownership in favor of car and ride-sharing, as well as mass transit.

That could play a major role in shaping the way the Peugeot brand itself comes back to the North American market, said Michelle Krebs, executive automotive analyst with Cox Automotive.

But she cautioned that even then, “It will be no cakewalk. The North American market isn't going to grow a lot.”

Krebs expects that the cars Peugeot brings back to North America will also reflect another major, ongoing shift: the growth of electrification. Most major manufacturers have announced plans to introduce hybrids, plug-ins and pure battery-electric vehicles, or BEVs, to their fleets. Rival Volkswagen AG, for example, expects to have more than 50 different BEVs, as well as dozens of hybrids, on sale by 2025.

While Dominique wouldn't say precisely what approach PSA will take, it has already begun adding electrified models and they are expected to play at least something of a role in the Peugeot brand's American revival.