Peugeot has not altered its plan to re-enter the North American market as a standalone brand by 2026, even as the coronavirus pandemic disrupts the industry and as its parent company, PSA Group, prepares to merge with Fiat Chrysler Automobiles.
Larry Dominique, PSA’s North America CEO, said the pandemic has accelerated a shift toward digital retail in the automotive space, which should help the brand as it prepares to launch a “highly digital, very lean” retail network.
“In some ways, what you’ve been reading through the pandemic and so forth, with the customer embracing digital and more toolsets becoming available in the digital environment, that actually in our mind accelerates the customer side of what we’re hoping to do,” Dominique said.
It remains to be seen how the merger would impact Peugeot’s long-awaited return to the North American market, which it exited in 1991. In 2017, PSA CEO Carlos Tavares tasked Dominique with charting out the company’s return to North America, with plans to bring a vehicle to market by 2026.
Dominique said he would continue his slow, methodical approach to avoid saturating the entire market with a large number of Peugeot stores throughout the region. PSA has identified 15 U.S. states and four Canadian provinces — Quebec, Ontario, Alberta and British Columbia — as potential entry points for the brand’s comeback.
“We’re not looking to roll into Canada by saturating the market with a certain number of retail outlets,” he said. “We’re going to be strategic. We will scale over time.”
Dominique said PSA is considering how consumer preferences shifting to digital sales could affect the pace of its return to North America.
“If the consumer base accelerates their willingness and openness to transact digitally, might we be able to accelerate or expand more rapidly? That’s just a consideration. We don’t have plans at this point in time,” he said.
Dominique said in February that Peugeot is focusing on re-entering the truck-heavy North American market in the compact and midsize car segments, while ruling out subcompact cars.
“I don’t have a pickup truck, at least until we’re married to FCA,” he said at the Canadian Automobile Dealers Association Summit in Toronto. “Then I might have a pickup truck. But initially, I don’t have a pickup truck, so the C- and D-segments are critical to us. That’s where we’re going to be concentrating our efforts.”
The pandemic has not altered those product plans, he said, adding that he did not “expect to see a big shift” in the segment mix of new-vehicle sales in the long-run.
The company is examining “innovative” ways to sell vehicles, including lowering investment costs for dealers by emphasizing the digital space over bricks-and-mortar showrooms. Dominique said Peugeot planned to be selective when it came to choosing markets and dealer partners.
“When we think about brands, in the marketplace today, we see a lot of competitiveness, a lot of intra-brand competition, and dealer margins are dropping,” he said, adding that Peugeot plans “to partner with the right people, applying innovation in the right way.”
Auto analyst Dennis DesRosiers said he saw “no real downside” to the merger for Canadian FCA dealers. But Peugeot would not be the right fit for every dealer, he said, drawing a comparison with FCA’s troubled relaunch of the Fiat and Alfa Romeo brands in the market.
“When you look at Fiat taking over Chrysler, it allowed them to bring in Fiat and Alfa Romeo product into Canada,” DesRosiers said. “Some dealers have benefited by it, but I bet you more dealers have regretted putting the investment in place to sell Fiats and Alfa Romeos. The market never really developed for those vehicles.”