Hi!
"One man’s treasure is another man’s junk!" -- to paraphrase that
timeless "South American" adage.
I.
"It is in fact the relative *lack* of population density and the large
land area that needs to be covered that places barriers before any
foreign car manufacturer seeking to build a dealer network in the US.
It was (and is) a tough sell trying to market a vehicle to a public that
worries about the availability of dealer service in remote areas."
US population density ranges from areas that are barely populated (like
Alaska) to some of the most populated stretches of landmass in the
world: East Coast of the United States from Pennsylvania to Boston or
greater Los Angeles area. Many Japanese and Korean manufacturers started
to market their cars on regional basis like the Kia which not available
on the most of the East Coast. I don’t believe that most Los Angeles
based buyers of Kia worry too much about availability of parts on
Martha’s Vineyard. Peugeot does not (and did not) have to attempt
establishment of a grand scale dealers network, the feat that was never
accomplished, or conduct an absurd marketing campaign aimed at nobody.
Instead, it can (and could) concentrate on key geographic and
demographic areas and then expand.
II.
"Which, of course, is an ideal market for a Continental manufacturer of
automobiles, language barriers or no. Good grief, even Ladas can find
willing buyers there! :-)"
No matter how I read those two sentences, they don’t make any sense. In
couldn’t figure out why the market with the most competing brands and
language barriers, local regulations, borders and customs will be ideal
for anybody. Well, whatever.
Lada is a Soviet built car which was considered to be the best in
Eastern Europe (which of course doesn’t say much good about Lada but
rather about limited choice available to Eastern Europeans). Since
about 1990-1991, Lada’s market share plummeted in Eastern and Central
Europe to, in some countries (like Poland) virtually 0. Ladas come in
two basic varieties (actually in three, the third being a rugged four by
four vehicle), the first is a beautified version of the legendary Fiat
124 and another is a Soviet creation in collaboration with Porsche. Both
varieties are firmly stuck in the 70's/early 80's and of course
obsolete. However they are very cheap (the entry level FIAT 124 (UK name
Riva) model would sell for under $5000), bigger than entry level Korean
cars) and are relatively well built (better than anything automotive
made in the US during 1970's and early 80's). In a painfully
quality-conscious country like Austria, Austrian Post Office used fleets
of Ladas as mail delivery vehicles. Lada also distributes Hyundai cars
through its dealers’ network and Hyundai does the same. While Lady is by
no means a good car (I would say a junk), it competes at about the same
market percentage points as do Dodge or Chevrolet in Europe. From 0 to
low single digits. Lady could never enter the US marketplace (even in
late 1970's, when its’ models were of general quality superior to North
American subcompacts like Pinto or Chevette), because of the embargo and
prohibitive, punitive US tariffs.
III.
"> the Peugeot is more successful than all US car manufacturers
> combined in such a market as Japan (perhaps the most densely
> populated major country in the world and certainly one of the most
> hostile automobile markets)
<snip>
, Peugeot has an easier time selling to customers in its own hemisphere.
France has strong economic ties to the areas you mentioned dating back
to the times when they had colonies in these regions of the world--and,
unlike North America, its colonial presence was felt in more recent
times."
Snip or no snip, Peugeot (compared to the North American made cars) does
exceptionally well in Japan as well as the rest of Far East. None of
the general areas I mentioned were ever, EVER, colonies of France or had
any particular economic ties to France. Japan was NEVER a French colony.
In that area of the world, only Vietnam (with closed market) was a
colony of France, however French colonial presence there "was felt" in
far more remote times than was, as we all know, the American one.
Peugeot’s largest foreign markets: the Federal Republic of Germany and
the United Kingdom have also never been French colonies (or where
they?). India wasn’t either as wasn’t Australia, Saudi Arabia,
Argentina. United States, not France, had "its colonial presence" felt
in recent times" in Central America or nations like the Philippines
where Peugeot does just fine. Huge French colonial possessions:
subsaharan Africa, Algeria, Indochina are not a major market for
Peugeot. I cannot figure why selling in own hemisphere (!!!) must be any
easier than in (the native?!) one. I should check the map, but I don’t
think that South Africa, Australia, Chile, Argentina, Brazil, etc. are
in the same hemisphere as France? Of course I could be wrong, they all
as well could be France’s neighbors.
IV.
"But those cars were cheap, and were eventually either dropped from
their manufacturers' respective lines or extensively redesigned to
address consumers' concerns. Even Peugeot got around to the turn
signal indicator business in the 505, but it takes *years* to live
down a bad reputation. Peugeot decided to quit rather than stand and
fight."
The mythical blinker (turning signal) problem is nothing in comparison
with the junk US consumer was made to buy.
V.
"I'm repeating what I read in the Automobile feature, not necessarily
stating my own point of view. Plenty of French manufacturers
havecmanaged to crack the US market by understanding what it takes to
market here (though most of the examples you mentioned, while
French-owned companies, do not manufacture in France for the US market,
Bic being an exception.) Peugeot either could never figure it out or
decided not to make the effort."
With the exception of the BIC (which manufactures almost all or now
actually all its products in the United States) and Danone (as it is
impossible to bring diary products into the US perhaps of the
restrictions to protect US diary producers or because I can’t envision a
sight of a supertanker filled with yogurt), almost all examples that I
mentioned: ATR, Fischer, Airbus, Michelin, Perrier, Aerospatiale,
SNECMA, Schlumberger make their stuff in France. The idea of a French
company being unsuccessful because it manufactures in France and not
hides under names of subsidiaries is just another confirmation (of the
prejudice/stereotypes/ignorance) point that I already made.
That’s about it. I’ll get to the rest of the message and to other
messages (Mr. Nordenholt? ) tomorrow.
I personally replied to several people now about that Mercedes Benz
thing, so let’s consider that subject to be closed. Drive the thing
away.
I also started a Peugeot links’ page:
http://businessopportunities.com/Peugeot.htm. Page is still ugly, the
design is pathetic but I will be working on it. If anyone has any links
to add, please e-mail me. I will also add a separate collection of
recent articles about Peugeot within next week and, of course, I already
made a list of 1996/97 Peugeot models with possible US prices. I would
think the cars would be cheaper if there were to be assembled in North
America though.
Eugene Soukharnikov
Providence, RI