Mike, Having a degree in economics, I agree with you that sometimes it gets theorized to death of common sense. Also, that Peugeot tends to take flight and not stay and fight when the going gets tough. The tough get going, Peugeot goes away. Example, when the second 604 that was exported to North America, enlarged to 2.8 liters with wonderful torque curve and great 5-speed spacing (1979) to handle a/c (and three speed GM automatic) was rated at 12mpg city, (about 18-20 highway) Peugeot objected, fussed and withdrew the 604 gas, leaving only the Diesel. Perhaps other makers would have gone to fuel injection and more mpg as originally planned for the 604 and then used for the 505-V6. Or touted the wonderful drive, acceleration, and feel that comes from a powerful drive train that by necessity requires more fuel. Peugeot just quit, which may have been prudent for the then present but was not prudent for their future here. Their action was against interest because as good as the 5!
05 was in certain respects, it was no Mercedes-BMW fighter in medium-full size cars as Mercedes thought the 604 was. By the way, the 12mpg city and 18-20mpg (memory) highway was accurate though at a steady 50-55, I could get 22mpg. Regards, Bernie
------Original
From: [Unknown Sender]
To: peugeot-L@egroups.com
Sent: January 4, 2001 5:19:33 AM GMT
Subject: Re: Peugeot's standing "dans le monde entier"
I tend to agree with Bernie's summation, although Brian does have
some good points.
However, most of the criteria Brian sets forth are very reminiscent
of an economist's take on what's really important. I am an
enthusiast first, although I am also conversant with economics.
Please remember, above all, that economic criteria such as share
value, ROI, output and reputation within the industry are by
definition short-term, relatively epehemeral measures of worth.
Economics has many failings, among which are its inability to
effectively plan for even the meduim-term future. To illustrate this
point, consider the matter of discounting. Future revenues are
discounted by, say 8%-10% per year in terms of their "present value",
to the point where, after 7 or 9 years, the future becomes completely
irrelevant to economists. That is, a revenue 8 years in the future
has no present value (worth today). Of course this is a nonsense,
but it is one of the main principles of classical economics.
This "dismal science" is largely responsible for many of the world's
problems; I wouldn't consider it, on its own, to be a sound
foundation for predicting the long-term future of any enterprise.
So, what is lacking in Brian's list is more of the things that I
value, related more to car ownership and enjoyment than pedagogical
abstractions or investment counselling:
-bulletproof reliability (see Toyota and others)
-excellence in chassis design (PSA's been slipping here of late)
-very good build quality (could be better)
-superb ride (formerly a Peugeot hallmark)
-very tough, super-robust drivetrains (not really possible with FWD)
-design flair, beauty (a mixed bag, ranging from the 406C to the 106)
-"je ne sais quoi", the intangible benefit of owning a particular car
Then there are some other management issues, among which are:
-aggressive management (not really, but it can get you into trouble)
-no fear of tough competition (they SHOULD be in USA, NOW!!!)
-positive attitude towards customers (it's not in the French psyche)
-good understanding of marketing (a mixed bag here)
-serious long-term committments to each market (I can dream can't I?)
The reason that Peugeot cannot be a "world player" until they have
more than a token presence here is that the US market is without a
doubt the world's most competitive. I think Peugeot is literally
scared to death about all the US consumer protection laws, class
action lawsuits, warranty insurance costs, etc, and scared by the
abilities of their potential competition over here. This is, without
a doubt, the reason the US 605 was axed - they would have been in an
Audi 5000 situation with that car and it would have wounded them
badly. Although there is some evidence that their recent models have
improved, they are still average at best. This is not enough, they
have to strive to be better. Selling cars here would help in that
process, although getting there will be painful.
Their current aggressive expansion is aimed at the Third World. Yes,
those markets are growing. But they are immature, and subject to
more volatility. Also, the "consumers" (formerly known
as "citizens", or "people") in these countries are not very
demanding, to be quite frank. If PSA is successful in this, and
these countries become PSA's main export market, don't you think
their customers in Europe might wonder in ten years' time why they
won't (or can't) sell a car in the USA, where customers are the most
demanding in the world? What would Peugeot's marketing slogan
be? "Buy a Peugeot, the official car of the Third World"?
Participation in the US market sharpens competitive skills, demands
very high engineering and management skills and prepares companies
for any challenges elsewhere in the world. I've got to hand it to US
people, they don't take shitty or even average products lying down.
Western Europe is far behind here: Scandinavia and Germany are the EU
areas with the most advanced consumer laws/civil movements, and the
German Gov't still won't allow companies to offer standard warranties
exceeding 3 years (most are 1 year, 20,000 km!!), as it would be
an "unfair competitive advantage". BMWs and Mercedes have one year
warranties in their home markets; welcome to the 1960s! France lags
behind Germany in consumer law and awareness. And it is the
company's stronghold.
Citroen will never be the same as it was in the 1960s - modern
markets don't allow for engineer's dreams to be built any more.
There is precious little room for unprofitable, over-engineered cars
these days. That's what almost sank Citroen in 1974 (and 1934, for
the historically inclined). The new Citroens will be innovative in
a "new Beetle" kind of way, but like the Beetle, more or less a mere
shadow of their former selves. The market wouldn't allow it to be
any other way.
Another comment: I just can't accept that VALEO is a "top-notch
supplier". I've paid too much money to those "salauds" in
replacement parts to believe it! Mikey's Postulate on VALEO: I think
that they designed barely-adequate (crap) products on purpose, low-
balled the manufacturers with a super-cheap loss-leader contract,
intending all along to make all their profit by selling replacements
for the crap OEM stuff that breaks prematurely. Seriously.
Brian, please don't laugh at the Prius. It may be ugly, but we'll
all be driving something like it in 15 years. Where is Peugeot with
the innovative hybrids? A few electric vehicles in municipal fleets
and for wealthy Parisians won't cut the mustard. You know why Honda,
Toyota, Mercedes and Ford are ahead on alternative fuels? Mainly
because of California's CARB regulations.
Having written all that, I hope that PSA has an epiphany and comes
back to the USA and Canada. Because it is a healthy presence here
that will ensure their continuation over the long term. And I'd hate
to lose another of the world's oldest manufacturers.
Regards,
Mike Tippett
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