PSA's Low Cost Efforts Bear Fruit

Derek Kreindler
by Derek Kreindler
psas low cost efforts bear fruit

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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  • 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.

  • Chris P Bacon It would be really nice if car sites like TTAC helped people find way to avoid these prices. It seems like stories like these just say "suck it up and pay the markup". No. In many cases, you don't have to. I just ordered a Wrangler 4xe and got Chrysler Affiliates price. That 1% under invoice. I know this is the price I got because I sat at the computer in the dealer's showroom and build the Jeep. i got Chrysler Affiliate pricing through my employer. Your employer doesn't offer it? Join For $100 membership, guess what? You get Chrysler Affiliate pricing! Want a Ford, but think you can't get X-Plan? Think again! Join X-Plan is included with their membership. A dealer in my area is offering Costco members a $1500 incentive. I'm guessing that has something to do with Costco's car buying service, so there must be some value to be found in that program.Will all dealers honor these discount plans? No. Then that's not the dealer you want to work with anyway. Find another place to shop. It would be nice if TTAC (or any car site) did a little leg work to show readers how to actually save on a car purchase.
  • KOKing I car-sat an A32 while its owner was out of the country, and the then whiz-bang VQ motor was great, but the rest of it wasn't any better than a XV10 or XV20. Definitely the start of its downward slide, unfortunately.
  • Norman Stansfield Why are leaf springs still a thing on this truck?
  • Syke The expected opening comments. Have had mine for two years now, the car has done exactly what I want out of it, and a little better. I'm quite happy with the car, haven't had to adjust my driving style or needs in the slightest, and . . . . oh, did a mention that I don't give a damn what today's price at the pump is?Probably going to go for a second one in the coming year, the wife's happy enough with mine that she's ready and willing to trade in the Nissan Kicks. Eventually, the not often used van will end up getting traded on a Chrysler Pacifica Hybrid, basically ensuring that we don't use gas for anything except the occasional long trip.And the motorcycles.
  • Bobbysirhan I've never found the Allegro appealing before, but a few years of EV rollouts make it seem downright desirable.