How will Peugeot automobiles be received upon its return to the U.S.?
Earlier this year, Peugeot-Citroen announced that it plans to return to the United States in the next few years.
As an enthusiast of average cars that nobody else likes, I exploded into a cloud of utter excitement upon hearing this news. Peugeot makes some brilliant cars that can definitely hold a candle to their American counterparts.
However, as proved by Fiat and Alfa Romeo, reintroducing a brand into the American market is not an easy task. Many Americans are loyal to their beloved brands, whether it be Ford, General Motors, or Chrysler (or any of its subsidiaries). Fiat tried to be a “boutique” car brand for a few years, initially selling only the normal, two-door Fiat 500 in the United States from 2010 until 2014, when the “L” variant was introduced. While it sold well initially, sales for all Fiat models have slumped in the last year or so.
The problem is that Fiat produced a significantly greater amount of inventory than there was demand for, which lowered the sale price of each unit. If Peugeot wants to reestablish themselves in the United States, they cannot focus on volume, at least from the start.
Upon reentering the US market, I propose that Peugeot only introduces their “DS Automobiles” lineup. DS Automobiles is a “premium” subsidiary of Peugeot-Citroen that produces a posh lineup of hatchbacks and SUVs. A premium French automaker would definitely draw the attention of many American buyers.
I also propose that they ditch the typical dealership model and adopt a Tesla-style model of operation. Initially, I would have a very low amount of inventory in the country; maybe a few hundred cars plus dealership demonstrators, and build each customer car to order and import it over to the U.S.
That will lower the amount of capital tied up in inventory, and makes the DS brand seem even more exclusive. If you meet or exceed demand, you will lower the value and reputation of your product.
As Peugeot continues to establish the DS name in the United States, they could begin introducing a few more Peugeot and Citroen models to the American market under the DS name. Should the brand become popular, they could begin manufacturing cars in North America to cut costs associated with importing and federalization.
Introducing a new brand into a market of other well-established products is never easy. That being said, if Peugeot plays their cards right, their cards will obliterate their American competitors.