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March 08, 2021 06:03 AM

Peugeot's U.S. return scrapped to focus on existing brands

The comeback was thrown into question after the merger of PSA and Fiat Chrysler

Peter Sigal
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    PSA had brought at least one Peugeot 508 (shown) to the U.S., and planned to homologate models in preparation to bring the brand back to the North American market after an absence of nearly 30 years.

    PARIS -- Stellantis has halted a plan to bring back the Peugeot brand to the U.S. market, saying it wants to concentrate on “existing brands” in North America after the merger of PSA Group and Fiat Chrysler Automobiles gave the new group a broader geographical reach.

    The plan for a comeback for Peugeot, last sold in the U.S. in the early 1990s, was thrown into question after the merger was announced in December 2019. Larry Dominique, the executive who had been leading PSA’s U.S. efforts since 2017, on Friday was named head of North America for the Stellantis brand Alfa Romeo. 

    A Stellantis spokesman said on Saturday that the "new context of Stellantis with a strong presence on U.S. market leads us to focus on existing brands.” 

    “This is why Larry will develop Alfa Romeo in this market,” the spokesman added.

    Dominique had been preparing for the Peugeot brand’s U.S. comeback for more than four years, with a focus on creating a distribution channel that shunned expensive stores and used technology to offload consumer-facing services such as scheduling vehicle delivery and pickup.

    The plan to return to the North American market was in PSA’s Push to Pass midterm plan from 2016, with a 10-year time frame. Early efforts focused on short-term rentals under the Free2Move brand. 

    CEO Carlos Tavares, now CEO of Stellantis, had sought to decrease PSA’s reliance on the stagnant European market. In recent years that dependence had only increased, with the 2017 acquisition of GM’s Opel/Vauxhall operations and a sharp decline in sales in China in the past few years. 

    Tavares had prepared for a possible U.S. return by ensuring that newer PSA models were homologated for the market, using expertise developed at Opel’s engineering center in Germany. At least one Peugeot 508 fastback sedan had been spotted in the U.S.

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    The merger with FCA gives Stellantis a balanced portfolio between Europe and the U.S., with the Jeep and Ram brands generating high profits from U.S. sales of SUVs and pickups. 

    Alfa Romeo has been showing glimmers of life in the U.S. The Italian brand’s sales rose 1.6 percent in a down market last year, but volumes are low for the Giulia sedan and Stelvio crossover. Two new crossovers soon are expected to boost the lineup.

    Tavares has praised the work done by Dominique and his team in the U.S., and says ideas they have generated have application across Stellantis. “Our [PSA] North American team in Atlanta that is preparing for the comeback of Peugeot in the U.S. market is bringing us many ideas in terms of logistics, in terms of maintenance, in terms of the distribution model, in terms of marketing communication,” he said in December in an interview with Automotive News Europe. 

    “Whatever we decide in the Stellantis world, all of those ideas will improve the way we go to market and the way we run the business,” he added.

    Vince Bond Jr. contributed reporting

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