DETROIT -- As PSA Group plots its decade-long comeback into the U.S., the automaker is considering a tech-centric, digital shopper-focused approach to moving sheet metal, which would reduce overhead and startup costs for dealers.
PSA's hybrid route into a highly competitive auto market could involve a blend of software tools, mobile applications and a low-investment, high-margin retail network. PSA, which owns the Peugeot, Citroen, DS, Opel and Vauxhall brands, intends to begin selling vehicles in the United States by 2026.
"We see the high cost of doing this business; we see the challenges that exist in profitability for dealers and OEMs," PSA North America chief Larry Dominique told Automotive News Europe sister publication Automotive News in a meeting this month. "We believe with the new tools, the new technology, the new customer expectations, there are leaner, more agile ways to do this."
Dominique stressed that no decisions have been made. But should PSA go with a dealer network, one aim would be to help dealers be profitable in an increasingly unprofitable business.
"The world is changing around us from a standpoint of the way the people buy and engage in purchases," said Dominique, 55, a former Nissan executive.
Dealership expenses as a percentage of total sales inched higher to 98.7 percent last year from 92.8 percent in 2015, according to National Automobile Dealers Association data. Losses on new vehicles ballooned to $421 per car last year from $22 per car in 2015. Even worse, dealers lost $2 per used car in 2017, from a $132 profit three years ago, marking the first time in years that dealerships have lost money on used-car sales.
"We need to find a way to reduce our fixed costs," Dominique said. "We want people to make a profit selling a new car."