PSA's Low Cost Efforts Bear Fruit

Derek Kreindler
by Derek Kreindler

PSA is looking to challenge Renault-Nissan’s dominance of the low cost car segment with a new sedan branded as a Peugeot.

The 301, shown above, will debut first in Turkey, with introductions following in Eastern Europe, South America and Africa. Based on the new 208 hatchback, the 301 was designed as a sedan due to the preference for roomy trunks in emerging markets (as as any Brazilian can surely confirm).

According to Bloomberg, the 301 is intended as a step up from the Dacia range, which are typically no-frills offerings devoid of most creature comforts. On the surface, it may seem that Peugeot is attempting a more premium low-cost car (as oxymoronic as that may sound) but that’s only part of the story. PSA not only lacks another nameplate like Dacia, but also the factories in countries like Romania and Morocco where labor costs are at rock bottom. The 301 is built in Spain, where hourly wages are five times that of Romania.

On the other hand, while Renault engineered the Dacia cars from a clean sheet of paper, the 301’s roots are in a much higher caliber of car, as the 208 is intended to help revive Peugeot’s fortunes in mature markets. While the 301 lacks the 208’s high end features like a touch screen and a start-stop system, it does have Bluetooth and advanced safety technologies not available on Dacia models.

Unfortunately for Peugeot, the road to conquering emerging markets is often fraught with obstacles, as one analyst told Bloomberg

“The market for these kinds of cars is the toughest…Peugeot’s trying to internationalize their business. The problem is that they’re always late to the party, with often the wrong product.”

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Derek Kreindler
Derek Kreindler

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  • Tuscreen-auto Tuscreen-auto on Nov 14, 2012

    "Both the 301 and its Citroen equivalent are unassuming but attractive cars – and they have more aspirational luster to them than Logans, Protons, or Tatas. In short, driving one of these, you don’t feel like a pauper, and you won’t be embarrassed if you could see yourself driving it. They’re just nice-looking little sedans. If there wasn’t already a Sonic sedan, I’d say Chevy could sell a version of it here ;)" Yeah, what he said.... :) I was going to post just the same thing. If Peugeot offered that car in Western Europe at Dacia prices, the success of this thing would be astounding. With the middle class slowly disappearing and the gap between rich and poor widening even in developed countries, such cars are the future on the global market.

  • Invalidattitude Invalidattitude on Nov 14, 2012

    Maybe its more against the Renault Fluence or Fiat Linea than the Dacia. Its would be a brand suicide to make a half baked Logan fighter 6500 euro Peugeot.

  • Stephen Never had such a problem with my Toyota products.
  • Vulpine My first pickup truck was a Mitsubishi Sport... able to out-accelerate the French Fuego turbo by Renault at the time. I really liked the brand back then because they built a model for every type of driver, including the rather famous 300/3000GT AWD sports car (a car I really wanted, but couldn't afford.)
  • Vulpine A sedan version of either car makes it no longer that car. We've already seen this with the Mustang Mach-E and almost nobody acknowledges it as a Mustang.
  • Vulpine Not just Chevy, but GM has been shooting itself in the foot for the last three decades. They've already had to be rescued once in that period, and if they keep going as they are, they will need another rescue... assuming the US govt. will willing to lose more money on them.
  • W Conrad Sedans have been fine for me, but I were getting a new car, it would be an SUV. Not only because less sedans available, but I can't see around them in my sedan!