When General Motors sold Opel and Vauxhall to French automaker PSA Group, the Detroit-based automaker sighed a breath of relief. The sale immediately improved GM’s financial health and minimized risk for a division that GM couldn’t seem to bring to profitability. However, it appears that Opel could soon be a headache again for GM, but in an indirect way. The Opel sale gave PSA Group substantial economies of scale and synergies in purchasing, manufacturing, and R&D. It also helped PSA Group accelerate its planned return to the U.S., according to a new report from Car and Driver.
The publication states that Peugeot is pulling ahead its return to America by three years. Instead of landing stateside in 2026 as previously planned, the French automaker wants to return by 2023, just four years from now. PSA Group CEO Carlos Tavares specifically stated that the new timeline comes as a result of its Opel acquisition, and that PSA plans to return Stateside with a robust portfolio of Peugeot-branded products.
The French automaker knows it’ll have difficulty making inroads in the highly-competitive U.S., the world’s second-largest but most profitable car market. Landing in the U.S. successfully requires making a splash, and Peugeot will do that with a plethora of vehicles including sedans, crossovers, electric cars, and plug-in hybrids.
That kind of product assault could become a headache for General Motors. As Peugeot plans for its U.S. return, GM will continue its reorganization, which involves bringing 20 new electric vehicles to market by 2023. Currently, electric vehicles are only a tiny percentage of new-car sales, a circumstance that will likely persist for some time. With Peugeot on the scene, likely campaigning heavily as it begins selling cars in the U.S. again, GM could face fierce competition from the French newcomer.
In the end, the U.S. market also has its limits, and can only support a certain sales volume. And while greater competition is better for the consumer, it might not be great for the bottom line of other automakers, GM included.
Subscribe to GM Authority for more around-the-clock GM news coverage.
At a time of year when luxury car ATP usually rises.
Sales decreased 5.6 percent to 16,670 units during the first ten months of 2024.
Specifically critical minerals supply chain development.
Scheduled for a Spring 2025 launch.
View Comments
The frenchies are going to exit the market again, because the US market is over-salutated with cars fighting for market share, which many automakers leaving (ie. Suzuki, Isuzu, Daewoo, etc).
Everyone's selling sedans and SUVs. They should sell some wagons. The 508SW is beautifully styled.
I agree, the Big "3" need to remember that the humble station wagon will always sell, another greta loking wagon is the Hyundai I-40 ... that we likely never see due to the soccer mama mindset. I had one soccer mom say she would not be caught dead in a wagon ... I replied, well your Equinox is no more than a 4wd station wagon, that blew her fuse.
If Peogeot is a headache, it will be for all manufacturers selling in the USA.
Why does this story belong on GMA?
Why does it belong here? It’s a rather clear-cut connection...
Because of the clearly obvious historic precedent between GM and PSA involving Opel, and the fact that it was GM’s decision to sell Opel (and the way it was sold) that is enabling PSA to launch stateside three years sooner than originally planned.
Yes, PSA will be a threat to all US automakers... but the move was enabled by GM essentially giving away Opel, thereby giving PSA the money and scale it needs to launch in the US.
Point taken, however, other than us (not U.S.) auto enthusiasts, whom in the buying public even knows what PSA and Peugeot is; they (PSA) are the one that will have an extremely uphill battle. Battle for sales will, at any rate, will be evenly competitive between all 'players' that are already in this market.
Dodge-chrystler wont be highly affected, RAM is all trucks (no Peugeot competitor) Dodge is almost a pure muscle brand (no Peugeot competitor) and Jeep is all 4X4 (no Peugeot competitor). Ford is dumping the sedan market, and is mostly large SUV's and trucks and GM makes all its money on large vehicles anyways. no skin off the big 3's noses. Aisian and german cars are the ones who should fear this.
The only way PSA works here is to undercut everyone in price. I really don't expect that.
The decline in the market growth means they will have to steal customers from other brands and that is only done with lower prices. Doing so often compromises price and leads to issues.
This is just another Fiat waiting to happen.
The problem is PSA will need to expand to survive as they have to do it on volume as they are not making it on profit per vehicle now.
Based on their current product they will not make it.
I'm not really optimistic on the success of the Peugeot brand in the US. Still thinking that Opel would have been a much better choice.
However, PSA Group focuses its strategy on pricing power and margins instead of volumes.
That's why one of their first decision they made after they bought Opel was stop selling cars at low price to car rental companies and the increase of prices.
I don't know how Peugeot is going to stand out there but it won't be with lower prices than Toyota or Chevrolet (oh actually I know : handling, Peugeot cars are well known wherever they are sold for their driving sensations)
great plan until the part "Peugeot-branded products".
i doubt they'll be able to compete in the low/middle segments of the market.
they should aim high and go for the luxury segment but they don't really have much product there.
but who knows. remember when republicans renamed french fries to freedom fries because the french wouldn't support the iraq invasion? maybe they are right again.
I'm actually looking forward to PSA returning to the USA. Having just returned from Europe and paid attention to what people were driving, I believe the French will do just fine here. The European market it also very competitive, so much so that Toyota was the only competitive Asian manufacturer. Honda, Nissan and the other Japanese manufacturers were MIA. A few Hyundais and a few American pickup trucks - which definitely stuck out from the crowd - but the rest were local. And the newer cars looked great! Very interesting styling and they seemed well built. If PSA comes out with some nice sedans for our market, and GM is still stuck in its "trucks uber alles" bender, I'd be interested in checking them out. Bienvenue PSA!
Being from Europe, and still living there, I don't really follow your analysis, for 2 reasons:
1) The Asian (Japanese) cars you see in Europe are subjected to quotas defining the maximum number of cars which manufacturers can import into the EU. Therefore the footprint remains low and mostly covers cars with high margins. This is how the EU protects its own manufacturers.
2) US cars and pickups are penalized in the EU because most countries tax cars based on engine displacement or on CO2 emissions (or a combination of both), 2 items where US engines have a disadvantage. Even German brands in Europe are usually sold with smaller displacement engines than what they offer in the US (i.e. the bigger engines are available in the EU but almost no one buys them). So if Peugeot wants to move to the US, they will only be able to offer small 4 cylinder engines and nothing else. Who in the US will buy a big sedan with a 1.2 L or 1.6 L 4-cylinder engine? If you see what reactions readers put on this forum when GM offers a 2.0 L 4-cylinder as a base engine, how will a 1.2 L be perceived?
In addition, the EUR-USD conversion will make them expensive compared to the Asian competition. And I haven't even brought up the "legendary" lack of build quality, where French manufacturers continuously run behind their German counterparts... They tried it in the past and it didn't work. They'll try it again, and it won't work. History is just being repeated.
Hyundai sell 1.6T all day long.
Exactly. And, PSA has a 1.6T engine as well; makes up to 270 ponies in the Peugeot 308 GTI.
Besides, it's not like PSA couldn't design and build larger, more powerful, engines for the USDM if they needed to.
Another case of GM enabling other company’s to come to the us ant grab sales from them. They did that with Fiat and now Peugeot.
"Another case of GM enabling other company’s to come to the us ant grab sales from them"
So it's completely GM's fault for letting other automakers into the US's free and open auto market?
French and Italian-branded cars leave most American buyers cold. No, I am not referring to high-end cars or exotics. There is a history of poor products from those two countries being sold here, and a lot of us remember them. Renault slid under the radar as "Nissan", and Fiat succeeds only as Mopars here. Hunyadi/Kia heavily discounted some solid offerings to break into the market. They also benefitted from a loose association Asian brands that are favored here. No so French LeCars of the future...Peugeot beware.