The last thing Stellantis needs in the U.S., it would seem, is another brand. The world’s newest automaker is already fully loaded, with more than any of its rivals.
So it came as no surprise last month when PSA Group execs began to publicly raise doubts about the planned return of their signature marque to the U.S. Its arrival would add Peugeot to an already robust list of Fiat Chrysler Automobiles brands — Ram, Dodge, Jeep, Fiat, Chrysler, Maserati and Alfa Romeo — now being peddled under the combined companies.
It’s too bad. Not only because the U.S. vehicle landscape would be richer with some French flair. But because the effort has been part of a bold experiment that has the potential to serve as a model — right before our eyes — for a new way to make the franchise system work better.
It’s been just over four years since Carlos Tavares, then CEO of PSA, announced the return of his company to the U.S. The charge has been led by one of his former Nissan colleagues, Larry Dominique.
From the start, it has been more about how than about when. The target debut date — “by 2026” — has been a curiously long horizon. But as Dominique has explained repeatedly, the goal has been to get it right.
Dominique has been focused on an asset-light, digital-centric approach — long before the pandemic. The goal is to reduce investment and ensure that dealers make money in a world that has come to accept some crazy practices as the norm.
Normal as in little or no profit from the sale of new vehicles. Normal as in frenzied races for profit lifelines in the form of sales incentives and bonuses. Normal as in continued investments in huge, sometimes glamorous, showrooms — as the world clicks its way to purchases over the Internet.
“There are leaner, more agile ways to do this,” Dominique told the staff of Automotive News three years ago.
And the message hasn’t changed.
“The future of our business is higher distribution costs, export costs, regulatory costs,” he told me last week. “We have to find ways to get smarter.”
For now, PSA North America’s mission continues unchanged — even if its future is suddenly up in the air.
“Everything continues to move forward,” said Dominique. That includes engineering and homologation work on Peugeot vehicles.
Tavares, meanwhile, has suggested it will be up to his new executive committee to make the call.
But it’s clear he’s shifted on the charge he gave Dominique long before a merger with FCA gave him an instant, seven-brand foothold in the U.S.
“This is something that, most probably, we are going to use, not specifically in the U.S. market, but maybe in another region of the world,” Tavares told Automotive News last month. “But I think that innovative thinking of that project has been very helpful.”
So, the world turns. And Dominique says he’s ready to turn with it and accept the challenge of taking his findings across the globe, if that’s what his bosses decide. And maybe someday some new practices will weave their way back to benefit U.S. operations.
Meanwhile, Tesla continues to advance with its direct-sales model, and EV upstart Rivian will bypass dealers with its planned entry this year.
Which should give Stellantis execs some pause as they make the call.
The cost of carrying another brand may be a small price to pay for the direct learning they stand to get from the Peugeot classroom.