Peugeot, the French car company, built its first automobile in 1889. Now, after almost 30 years since it sold its last car in the United States, it will reenter the market in the next three or four years.
In its time away, imports have become dominant players in the American markets, with large shares of both the sedan business and sport utility vehicles and crossovers. And U.S.-based companies General Motors and Ford are still the largest manufacturers in the United States, based on unit sales, and had some of the top-selling cars in America in 2018. That means Peugeot has to siphon sales away from dozens of brands.
Peugeot is part of one of the world’s largest car companies, the PSA Group. It was the world’s ninth largest car manufacturer last year, with sales of a little over 4 million vehicles, just behind Fiat Chrysler Automobiles. PSA Group’s major brands are Peugeot, Citroen, Opel and Vauxhall. It bought Opel and Vauxhall from General Motors in 2017. That made it Europe’s second largest car company behind Volkswagen.
Peugeot’s chief executive, Carlos Tavares, said he plans to sell a mix of the company’s model lines in the United States. He told The Wall Street Journal, “What we can bring to the U.S. is based on everything you see today. We are launching our pure electric cars, we are launching our plug-in hybrid cars, we are launching great SUVs. There is no limit.”
Peugeot says it already sells cars in over 150 countries around the world. Most of its cars, crossovers, and SUVs are relatively small, like its best-selling vehicle, the Peugeot 308. As with most major car companies around the globe, Peugeot management believes that electric cars, ride sharing and cars connected to broadband for communications and driverless vehicles are the wave of the future. As a matter of fact, Peugeot expects a quarter of all cars sold in 2030 will have some form of electric motor.
Tavares acknowledges that it will take years to get a strong foothold in the United States, even if he markets most vehicles in the Peugeot line. But he has little choice. The United States is the world’s second largest market after China. American car and light truck sales have been above 17 million for each of the past three years. While the Chinese market produced 28.1 million vehicle sales in 2018, this number fell 2.8%, the first drop in three decades.
Peugeot’s fortunes in the United States could go one of two ways. Fiat Chrysler brought its Fiat brand back into the country, but it only sells a few thousand units a year, despite extensive marketing efforts. Fiats are among the cars Americans don’t want to buy. At the other end of the spectrum are South Korea’s Hyundai and Kia, both introduced into the United States in 1986. The two lines are currently among the best-selling brands in America.
Peugeot built its first car 14 years before Ford was founded. As it enters the United States, that may not count for much. Peugeot has been away from America for so long, it will need to earn sales as if it were a new brand.