Peugeot, PSA Group's biggest brand, left the American market in August 1991 and hasn't been back since. Company boss Carlos Tavares has worked hard to put together a comeback plan over the past few years, but the looming merger with Fiat-Chrysler Automobiles (FCA) might make it irrelevant.
"For the time being, we see the strength of FCA in North America, which is outstanding. We have 12 months ahead of us to think about what we do after closing [the deal]. This is something we will have to consider, and a decision will be made after closing. We all recognize FCA is not only a big player in North America, but also a highly profitable player in North America, which is a big reason for the combination of these two companies," Tavares told analysts during a conference call.
The 12-month window the executive referred to is the time he expects it will take for PSA and FCA to fully merge. And, like we previously reported, bringing Peugeot back to America makes a lot less sense when PSA is under the same roof as FCA than when it's navigating through the automotive industry on its own. The United States is the second-largest new car market in the world, so PSA could significantly boost its annual sales by establishing a secure foothold here. Reintroducing Peugeot models in America is easier said than done, as is setting up a distribution network, but the game is worth the candle. Adding FCA into the equation significantly changes the situation, however.
The North American market will represent 43% of the merged company's annual sales thanks largely to Ram and Jeep, so PSA will no longer be dangerously reliant on the volatile European market. Viewed in that light, Peugeot's Atlanta-based American division would quickly become another fix-it item on FCA's growing to-do list. It also needs to figure out Chrysler's role in the alliance and give Fiat's American dealers something to sell while simultaneously turning around Alfa Romeo and Maserati. Teaching Americans how to pronounce Peugeot is rather low on its list of priorities, so we wouldn't be surprised if the American offensive gets trimmed or consigned to the attic altogether.
FCA and PSA warned the merger might not happen for 12 to 15 months, so the two companies could remain independent until early 2021. This timeframe gives Tavares and FCA boss Mike Manley plenty of time to figure out whether to give Peugeot another shot at the American dream.