Struggling French car maker PSA Peugeot-Citroen is back on death watch with recent announcements that it was canceling its collaboration with GM on a small car AND the news that Dong Feng and the French government were thinking of getting a stake in the company to try and save. I've been wondering if it's even worth trying to save that company.
I grew up in a Peugeot household during the 80's and 90's and while I never had a Peugeot Poster in my room (I had old Grand Prix de Monaco replicas on my wall) Peugeot has always been my brand. I always viewed it as making durable, conservatively-styled, solid cars that just worked and drove well. Since people vote with their wallet, my family's fleet of cars includes a shit-green 1986 505 Break (2.5 turbo), a weird-green 1997 406 Break (3.0 V6), a 1987 205 Gti (not the 1.9 sadly) and a 1981 Citroen Mehari. Knock wood but none of these cars have given us any real trouble and to this day they are still a pleasure to drive, especially the torquey RWD 505.
My love for the brand and its history are therefore understandable and, like most fans I wish for the company to do well and to make crazy/awesome cars. Peugeot is failing on both fronts and that is just breaking my heart.
The diesel hatchback addiction
Mush like pre-financial-crash American manufacturers were addicted to large BoF SUVs and trucks, Peugeot has for years been addicted to small diesel Hatches, which, to their credit, were selling like hot cakes in Southern Europe. That strategy worked fine as long as the economy was good and enabled PSA to focus on its obsession, making GERMAN QUALITY cars (I'd bet that half the execs at PSA stay awake at night wondering how to replicate that deep German door thump). This kept PSA as a mid-size car maker selling mass-market cars on an ultra-mature market and inevitably, when that market crashed (and it is still crashing) Peugeot took a bath. Had they had a more diversified portfolio and access to more markets, they could have weathered the storm but that's not the only reason why Pug is in such deep sh*t; let's take a look at a few other reasons.
Peugeot: Fish-mouth edition
In the early 2000's, Peugeot had a relatively harmonious lineup with some conservatively styled cars and some lookers; the 306 Xr was one of the better looking cars of its time, IMO.
The 607 was good for its time and who could forget the Pininfarina designed 406 Coupe:
Then in a few years it went to this:
Or better/worst, this:
To be fair they're trying to right the ship now, and newer releases like 508 and 208 are rather pretty. Besides, it's just my taste and I may be the only one who feels that way.
Flacid International expansion
PSA's captive markets outside of Europe were mostly in Africa and that continent mostly took whatever it could so old station wagons and later old production lines were sold there but PSA never took that market seriously and as a result, most guys ther now would rather have a Toyota pickup than a 30 year old 504 wagon...
These are the BRICs: the group focused on Brazil and China but was slow footed and made big mistakes on both these markets. Citroen was in China before VW Group but due to poor strategy and planning they'll never be a big player there while VW literally owns China. I live in China and it's funny, I've asked the people I know who own a Pug or Cit why they'd bought it and the answer was always "because I couldn't afford an Audi/BMW/Mercedes"...
Iran: PSA had a decent gig there for years selling knock down kits and parts to Khodro; of course that went south when GM came into the story (more on that later).
So really, as a group, PSA missed the international train. It has a decent world footprint, but nothing that could hedge its position in western Europe and nothing that could give it the kind of volume it needs to be competitive as a mass market player.
Choose your friends wisely
When I learned a few years ago that PSA and BMW were going to be collaborating on engines, I thought it was the best news I could hear. Both these firms are family owned, they occupy segments that don't really compete, and for them to collaborate on engineering sounded just great. An optimist could have seen Pug getting back in the RWD sedan market and BMW could get a lot of FWD expertise as well as tips on low cost manufacturing. The first fruits of that relationship were small sporty petrol engines shared by Mini and Peugeot, and the future seemed bright.
Then one day I learned about GM buying 7% of PSA and a few months later it was announced that the BMW partnership would not be renewed. I have no hate for GM, in fact I root for US automakers but GM was the worst partner I could think of for PSA. That's like saying, no, I will not have any of this wonderful Bavarian beer, I'll have a Bud Light instead. Opel/Vauxhall is the same kind of limp-d*ck, middle of the road, car maker that has a lineup that puts people to sleep and a shoddy image (come on, OPC isn't fooling anyone), much like PSA nowadays...
To further matters, GM's participation meant that the morally-dubious cash-cow that is Iran was now out of the picture.
With these choices all my excitement for the future has been replaced by dread at what's to come next...
How about a bit of branding?
US readers might have a different perception of Peugeot and Citroen than people who have access to these cars in their domestic markets but here goes anyway.
Citroen, a part of PSA, has done much over the past few years to regain its exciting or at least quirky image. People like the brand and its new premium offering, the DS line (IMO a cynical attempt at using an iconic car to sell iPods) is doing quite well and offering the kinds of profits the group needs oh so badly. But it is truggling with its international image (thank you Beijing taxis).
Peugeot, however has a very muddled image. Its cars are quite expensive but resale is crap and as a result the people that Pug wants to sell cars to want to buy German. So it focuses its branding on quality (a reminder to everyone that they remain behind ze germans...), and sometimes on design, then on performance... No one knows what the brand stands for anymore and its recent troubles, unfortunate design decisions and quality issues have robbed it of most of its goodwill.
Another frustrating aspect of being a Pug fan is their concept-car policy. They consistently produce absolutely fantastic concepts (along with some super weird PCP/crack dream cars) that are either never reused or watered down so badly that they lose any impact.
In China, the brand stands for not-very-much. We French are not known for our engineering but for our design and luxury. You'd think they would try to capitalize on that but... no.
I once asked a PSA exec located in China why Pug wasn't pursuing a "family car" strategy instead; Chinese people cherish their children and worry about their safety and well being (I guess all humans do). Pug happens to have many ugly, un-sporty cross-over or MPV type vehicles that are great to haul a kid in, and quite comfortable. Throw in a high-spec particle filter to protect said babies against air pollution, add in a few cup holders, some stain-free fabric and voila, you can start selling 3008 and 5008 Baby edition cars and people will know that the Lion is their to protect you (ok, that's BS but I came up with it in 4 minutes). The exec was unimpressed (not a huge surprise) and told me that China's market was about capacity and not branding. Given the disappointing launch of the DS line last year I can't help but think that is not the case anymore...
Now that I've spilled all my bile about this subject and established -rather completely I think- all the aspects in which PSA failed the question remains: Does PSA Peugeot-Citroen deserve to be Saved? I wish it so, for both nationalistic and sentimental reasons -and the group's employees certainly deserve it too- but from a business case standpoint, it's gonna be a tough sell.
Tl:dr PSA made horrendous decisions and bet on the wrong markets but it's trying to turn itself around. Does it deserve help?
Tell me what you think!