The case study PSA Peugeot Citroen: Reentering the United States examines the possibility of the French automobile company reestablishing itself in the American market. The automobile company aims to reduce its dependence on the declining European market by establishing operations in the United States to respond to the growing pressures in the global market. Peugeot brands are known to be produced by the French automobile company PSA Peugeot Citroen. 

When the company ceased operations in North America in 1991, it renounced its plan to re-establish itself again on American soil in 2017. This is not the second time to renounce the plans as it has had made efforts to reinstate its operations in 2003, 2004, and again in 2016 when the company partnered with a French-based sharing operator. After 26 years, the company has plans to reinstate its operations. This quest has been driven by the focus of the CEO, Carlos Tavares. (本文轉載自www.studue.com)

Initially, the company focused on a car-sharing strategy when reentering the American market. This included a phased plan where the reentry entailed operating a sharing service, possibly with EVs from the French Conglomerate Balloon, and car-sharing and mobility services with own vehicles and most retail sales in the American market. Mainly due to a number of reasons, PSA was not successful. These reasons include lack of commitment, lack of adaptation, political pressures from the home government and increased local competition on American soil. (本文轉載自www.studue.com)

 

The American market requires economic commitment before entry. US automobile market is dire needs larger and larger engines. With the latest technology, the financial commitment that European automobile makers of the ‘60s and ’70s such as Peugeot, Skoda and Rover are not willing to provide. Committed cars are readily acceptable in the US market. The US is a massive market that even luxury makers such as BMW commit to dozens of upscale cities, but huge commitment is necessary for mass marketers like Peugeot. Again, Citroën lacked adapting to the market since it seemed to be manufacturing cars focused more on Europeans rather than Americans. The company needed to study consumer buying behavior in targeted segments in America before entering. Americans value big cars instead of relying on past data since corollas were still considered large sedans in japan during the gas crisis. The French government pressed French makers to kills their best brands such as Deluge and Bugatti by taxing them heavily. This allowed for the construction of smaller models. Deepening the state, the US does not accept weak quality controls, and this lack of oversight has long punished French manufacturers. Makers such as Citroën have not been able to produce quality cars acceptable to customers. This has given French and Italian manufacturers a chance to beat them in luxury and sports cars. The company faced stiff competition from companies that taken strategic turnarounds such as Tesla, Tata, Volkswagen and Toyota. (本文轉載自www.studue.com)