By on August 3, 2017

Citroen C4 Cactus, Image: PSA Group

The long-awaited return of PSA Group — French builder of Citroën, Peugeot, and DS cars — to the U.S. marketplace was never going to be a quick operation. Americans weren’t going to suddenly wake up one morning to see neighbors Bob and Carol bundling the kids into in their brand-new Berlingo Multispace. Their other neighbors, Ted and Alice, wouldn’t suddenly arrive home in their Spacetourer and C-Elysee, jockeying for the parking space closest to the door.

The C4 Cactus, with its quirky Airbump inserts and 1.2-liter three-cylinder, won’t begin appearing in Walgreen lots overnight.

For PSA, returning to the U.S. is akin to a kid standing next to a cold pool, dipping one toe in first, then the foot, followed by the lower leg. To dive in without a plan would be to risk disaster. Having already established that first toehold (which you’d be forgiven for not noticing), the harder stuff awaits, and PSA remains cagey as to when we’ll all be driving around in Citroëns. It just knows it can’t screw it up.

“We have a chance to do this once, and only once,” said Larry Dominique, CEO of the fledgling PSA North America, at this week’s 2017 Center for Automotive Research (CAR) Management Briefing Seminars.

No pressure, surely.

In April, PSA North America brought the popular overseas TravelCar ride-sharing program to the Los Angeles and San Francisco airports, allowing travellers to borrow a stranger’s car for less than the cost of a rental. A stranger’s regular, non-French car, to be clear. The initiative, the product of a $16 million partnership with TravelCar and MAIF Group, is just the beginning.

A year prior, PSA CEO Carlos Tavares declared the automaker couldn’t call itself a global company without an American presence. It’s since crafted a 10-year plan to ensure it happens. However, dealerships and service centers don’t come cheap, so PSA plans to use technology and partnerships wherever possible to soften the financial blow.

“We will take advantage of new technology while keeping the values of a car company,” Dominique told the audience in Traverse City, Michigan, while admitting to the need for a crash course in how to operate as a new player in a large market.

In Europe, PSA now holds the title of second-largest automaker. Tuesday saw the completion of PSA’s purchase of General Motors’ Vauxhall and Opel brands, pushing the company past Nissan-Renault and closer to market leader Volkswagen Group. It knows Europe, but hasn’t stepped foot in the U.S. since Peugeot disappeared in 1991.

Knowing it can’t get too modern in how it offers its vehicles (Tesla products remain off limits in many states due to dealer franchise laws), PSA hopes to find help in getting its presence felt.

“We are looking for progressive, innovative and digital-minded partners,” Dominique said, adding, “I’m not prepared to talk about how we are going to come to market (in North America) but it will be practical, traditional and use technology.”

What sort of technology? According to Dominique, the automaker desires predictive technology to “determine market needs, second by second.”

Okay… Having proper inventory levels in different regions is nice, but it’s not the be-all and end-all. As for product, it’s no secret as to what Americans want. Crossovers. Not sedans, not even sports cars — crossovers. It’s possible U.S. buyers could also desire the quirkiness of a premium French automobile. Regardless, it’s clear PSA execs aren’t seeing visions of mondo profits arising from a U.S. foray anytime soon, hence the need to keep the budget down.

After its recent bailout by the French government and subsequent return to profitability, caution remains the name of the game.

[Source: Wards Auto] [Image: PSA Group]

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44 Comments on “Waiting on a Cactus: PSA Says It Has Once Chance to Get U.S. Re-entry Right...”

  • avatar

    I like the Cactus. It appeals to me.

    So did the C6, but that one’s all gone.

    • 0 avatar

      The quirkiness will be face-lifted out of the Cactus soon. It will replace the “normal” C4 then. At least, that’s what I’ve read. Replacing one cheap and quirky—if not all that good—car, and one expensive and good—if somewhat boring—one, with one cheap and boring one: not exactly a recipe for success, I’d wager.

  • avatar

    They have a 0% chance of success in the US.

    Crossovers sell to risk averse people, families, etc. They aren’t buying a new brand from a country they didn’t even know made cars.

    Maybe, MAYBE, they could pull off a Mini-style success with a quirky small car, but not any time soon, with gas so cheap.

    • 0 avatar

      They’re buying partially French cars now with Nissan.
      Oh and Mitsubishi.

      • 0 avatar

        So now Nissan and Mitsubisi are French companies, Honda,Toyota and Subaru are domestic American companies (like in “See USA in your Toyota”). Are there any Japanese companies left? Only one I can come up with is Mazda and it is on the brink of bankruptcy.

        • 0 avatar

          For CUVs, the French just put a gallic nose and badges on an Outlander or Xtrail/Rogue and call it day….

          However the Cactus is not a success outside of France and its easy to see why.

          Why would you pay stiff CUV prices for a subcompact CUV that has no split fold rear seats nor does it have wind up windows (they are pop out).

          If the car was super cheap that’s one thing but this aint… and I do like the outside design.

  • avatar

    “long-awaited return of PSA Group” – was that sarcastic? Because no one is waiting for PSA to return.

  • avatar

    I think PSA has a better chance of success in North America than most people give them credit for.

    The CEO of the North American operations can make or break the foray, just compare what John Krafcik did with Hyundai to how Laura Soave gave FIAT a horrid start out of the gate that they never recovered from. Larry Dominique did a pretty good job with Nissan and PSA seems serious if they hired him.

    PSA knows that crossovers sell. All they have to do is keep the quality and service levels up along with offering some kind of incentive to try their product (long warranty, competitive pricing) and they should have a fighting chance.

    • 0 avatar

      I don’t think they have product to succeed in US. Funnies thing would be if they sell Citroen-badged Opel, same as Buick

      • 0 avatar

        I’m quite sure “cover my @$$” GM has a clause somewhere forbidding them to market Opel products in certain areas where GM markets them as Buicks. If they did a car on the same platform but with different powertrain, body, interior, etc that might be one thing. But a rebadged Regal for $XXXX less? I doubt GM would allow that possibility.

        Besides, to me it sounds like PSA wants to build Opels on its platforms, not the other way around.

        • 0 avatar

          PSA’s deal with GM forbids them to sell their models based on GM platforms anywhere outside Europe. So they would have to develop new products on their own platforms.

  • avatar

    Am I the only one here who thinks this baby would sell?

    • 0 avatar

      Considering that Juke is leaving, there could be some spots in the niche. + Hyundai is bringing something that looks just like that

      • 0 avatar

        Lest we forget the Toyota CUV that dare not speak its name (for fear of confusing it for a small Honda CUV). Also the Cherokee before it gets its big brother’s face during its upcoming refresh. (All Jeeps aside from Wrangler and Renegade look like Russian nesting dolls, or they will once the Cherokee and the Wagoneer/Grand Wagoneer join the party.)

        I think the AIRCROSS is the looker of the group. It looks more upscale, and I like its cabin A LOT more than the Juke or CH-R.

    • 0 avatar

      Well, ask your local Fiat dealer about the 500L, and maybe you’ll get an idea why that Citroen won’t sell.

  • avatar

    That car is cute as a button.

  • avatar

    If Hyundai can go from being a punchline to a joke to what it is now, then anything can happen.

  • avatar

    With the Cactus I see a strong potential for decent fuel mileage. With that 3-banger under the hood, I see massive disappointment for PSA as it’s going to be weak as a kitten next to its American (and Americanized Asian) class members.

    • 0 avatar

      I’m betting it’ll have at least a more powerful optional engine (turbo 3 or an I-4), if not standard, in our market.

      I genuinely like their vehicles (from what I can see, I have no experience with them). I hope they come here and give us something different in a sea of Audis and Altimas.

      • 0 avatar

        I’m wondering if they’ll come in with the same baggage Fiat did; an undeserved reputation that was so obsolete that not even “stale” could describe it.

  • avatar

    I am all for more brands joining our market, the more unique, the better.

    I love having the choice, its a great feeling to be exposed to different expressions and ideas of an automobile.

    Of course, some work out better than others, but I like quirky and something different. PSA cars are nothing if not interesting, and they look well done. They’re modern, classy and stylish. At least to me.

    To PSA, Alfa Romeo, Skoda, etc, welcome, and I wish you success.

    In keeping with that, Chinese cars I see progressing very quickly, undoubtedly fostered by influence (including forced marriages by the state between outside manufacturers and Chinese automakers) of other world manufacturers. It won’t be long before they’re here as well, if nothing but to fill rental car fleet orders and finance sub-prime car buyers like Mitsubishi pretty much does.

    • 0 avatar

      WRT Chinese cars: I think that they will buy up existing brands and leverage that into cars sold in North America. We’ve all been told that the Chinese were coming for the last 15 or so years. It’s true, they are here, in the form of some Hondas and Buicks.

      That said, I’m also always glad to see another choice for consumers.

      • 0 avatar

        Which Hondas? I was aware of the Volvo car and the Buick Envision only.

        I was speaking of Chinese brands, not just cars from brands we know that are built in China.

        • 0 avatar

          Honda brought the previous generation Fit from China into Canada in low volumes. Never into the US. I think this was for a very limited time and now all the Fits come from Mexico I believe.

  • avatar

    I was in the Netherlands back in April and I rented a C4 Cactus for two days. That little engine and 5 Speed stick was a quick enough (Certainly no sporting aspirations) and very comfortable. Its a cool little car and I had fun with it.

  • avatar

    Back in Sept 2014, Tavares of PSA said they would return to the US in the 200 biggest cities. Ooh. They would do it with the DS brand, which is one of three making up PSA (prior to Opel) that also includes Peugeot and Citroen. DS is their “upmarket” brand, originally spun off from Citroen.

    Like that happened.

    /meanwhile in Europe, sales of DS vehicles fell from a high of 117,000 in 2012 to a mere 65,000 in 2016 and are sinking further to an expected 50,000 this year. DS has basically reduced itself to irrelevance since that total comprises about four different vehicles and needs updating. Where’s the money for that coming from? Uh .. maybe Macron.

    So one can imagine the brainpower at work within PSA: Of course! We’ll just send them (USA) Citroens instead of DS! Success will be ours!

    Tavares is supposed to be Ghosn-sharp, Ghosn being head of Renault-Nissan, but the evidence is missing in action on this score. If he really wants to blow it entirely, he can try returning to the USA with some mixture of PSA models. Not a chance such a move would be a success, merely the sight of chucking a giant bucket of euros overboard into the North Atlantic. But these hard-chargin’ CEOs all have some pet project or another! Might as well try to grow broccoli in the Sahara, the chances of success are the same. Or living in surplus steel sheds on Mars for that matter. Same kind of egomania.

    • 0 avatar

      Employer: You can’t work here, you have no experience.

      Applicant: How do I get experience?

      Employer: By working here.

      Applicant: But I can’t work here without experience?

      Employer: Right.

      Lots of cars work here when few thought they could. Hyundai and Kia managed to drag themselves up after dismal entries. It might not be easy, but its possible. PSA cars are a proven commodity elsewhere, but they can prove themselves here just like any other brand can/has.

    • 0 avatar

      DS is completely focused in China, there they have several China-only models such as the 5LS, 6WR and the 7. It is odd that their European branch have such comically outdated and overpriced models.

  • avatar

    Citroën cars with their advanced hydropneumatic suspensions are actually a great fit for our increasingly potholed streets.

  • avatar

    It has “just once chance”? No twice chances in the car business!

    • 0 avatar

      I saw that too. I still make mistakes, but if I read my post (like I will this one) after I submit it, I will do my best to catch such a slip and correct it. I would think submitting an article, and having that article edited, would be even more of a big deal.

    • 0 avatar

      Thank goodness someone else noticed that too. It’s inexcusable that it hasn’t been corrected, but not surprising these days…

      Grammar Death Watch #257.

  • avatar

    The Cactus will be prickly. They are French and will turn and bite the hand that feeds then.

  • avatar

    You are absolutely right, resale value is one of the three legs on which cars are sold, style and durability being the other two. The problem is French products have no resale value, the DS while comfortable cost a small fortune when you had a hydraulic leak, nobody here knew how to fix French.

  • avatar

    PSA needs to stand out somehow, and not rely only on just their unique style. A small percentage of car buyers will be interested in their Frenchness. Many more would be looking for Japanese or German qualities.
    So they have to have a terrific warranty, good dealership experience, competitive pricing, adequate inventory and plenty of marketing. Without any of those five characteristics, they would likely not succeed. Very comfortable seats and good ergonomics would seal the deal.
    A good pickup truck would help get the customers to come around and take a look, but that’s not likely to happen.

  • avatar

    My wife and I are some of the (very) few remaining people in the US who still own and drive a French car on a regular basis. We’re recidivist Citroën, Peugeot, and Renault owners. In short, we’re exactly the demographic within the rest of the car-buying public that PSA should be targeting as – to borrow Subaru’s terminology – ambassadors while they establish themselves, again, in this part of the world.

    The reality, however, is that PSA has absolutely no interest in talking to us, or anyone like us, about what we want from a car made in France. Perhaps this is because they realise that we see their current crop of cars for what they are: Euro-generic, and lacking any of the traditionally French qualities that we like in the models that they sold here at one time. Perhaps we’re just the wrong demographic: not ignorant enough of the fact that they left the market in 1991, and very much aware of the mistakes that they made that led up to that decision.

    However, they may be able to spearhead their re-entry publicity campaign with a pop star that those millenials we hear so much about could relate to. I understand that that J-Lo singer the kids love so much isn’t doing much in the automotive world these days; she might possibly be open to collaboration.

  • avatar

    The big, and hugely expensive, problem with distributing cars in N.A. is having a comprehensive dealership and service network in place. To me it would make sense if PSA struck up a deal with Sergio for joint utilization of his network of Fiat dealers. God knows they’re hurting due to his hubris, unfulfilled product promises and dismal sales numbers. It could be the answer for both of them.

    • 0 avatar

      “To me it would make sense if PSA struck up a deal with Sergio for joint utilization of his network of Fiat dealers.”

      GOOD LORD NO!!!!! That dealership chain is abusive enough already without adding another import brand they don’t want to sell!

      Since they’re already working with GM, the Chevy or Buick dealership chain would be far more logical and probably offer them a superior brand of dealership (except, maybe, in Chicago.)

    • 0 avatar

      I was thinking this very thing.

  • avatar

    Been traveling in Holland for about a week. We see about one Cactus a day. They are several colors, look best in non-contrasting colors such as all-dark grey/blue. The white/brown only looks good if you miss woodie wagons.

    Practically no cars one sees in North America. Probably the most common also seen in NA is the Prius. We see Teslas every day. And a couple of Mitsubishi Outlander PHEV’s. They do exist.

    People here have to drive with a level of precision, and respect for each other, that would be completely alien to North Americans.

  • avatar

    Funny how rich Europeans love Jeeps and other US SUV’s, when they can afford it that is, feel sorry for the Europeans when self driving cars arrive, the’ll just have to sit in their uncomfortable eggshells and use VR for their precision driving

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