Car Industry

Peugeot, Citroën hope to make dealerships profitable again upon return to US

With a rumored 2026 return to US shores, the French automakers are investigating new, leaner ways to sell their cars to the American public.

Citroën

Rumors of Peugeot and Citroën's return to the USA have been kicking around for years now, but it seems like the PSA group which also includes Opel is finally getting serious about things. However, it's not going to be easy to convince franchisees to build dealerships for brands that haven't been sold here since the mid-1970's and the early-1990's, respectively.

However, according to Automotive News, the PSA group thinks it has a solution to this that would reduce the dealer's startup costs, keep profit margins high, and make the buying experience simpler for US consumers. A large part of this plan would likely include an app and various other digital means to smooth the buying process. We imagine it would function something like Hyundai Shopper Assurance.

The road to US sales will be challenging for the PSA group, but if it means we get C4 Cactuses and SpaceTourers, we're all-in.

Wayne Cunningham/Roadshow

That bit about increasing margins for dealers is key here. According to data from the National Automotive Dealers Association, dealers were losing around $421 on every new car deal and $2 on every used car deal after expenses in 2017 compared to a loss of just $22 per new car and a profit of $132 per used car in 2015. At these rates, why would anyone want to take a chance on a now relatively unknown brand?

"We see the high cost of doing this business; we see the challenges that exist in profitability for dealers and OEMs," said Larry Dominique, head of PSA North America, to Automotive News. "We believe with the new tools, the new technology, the new customer expectations; there are leaner, more agile ways to do this."

While Larry Dominique, formerly an executive for TrueCar and Nissan, states that the brick-and-mortar dealership isn't going away, he does envision a model where the more profitable aspects of the dealership, like service and F&I, are allowed to shine with things like customer delivery being handled elsewhere. He also insists that PSA won't ask potential dealers to build large, expensive and elaborate dealerships to sell its brands.

This man, Larry Dominique, is working to bring quirky French cars back to America. 

Jim Watson / AFP/Getty Images

"I don't want to go to people and say, you have to build me a Taj Mahal with this color tile and this fabric on your chairs," Dominique said. "When you have a high-fixed-cost base like the way the retail environment is today, it's just challenging to change that cost structure."

Currently, it looks like PSA is aiming for a triumphant return to the US by 2026, though it won't elaborate on which of its brands would be leading the charge.