French Leave

I should have known it was too good to be true.

When Fiat Chrysler and Peugeot (also known as PSA) merged earlier this year, forming a new company called Stellantis - sounds like the name of a sunken continent, doesn't it?  - Carlos Tavares, the Peugeot chairman who shepherded the merger and became the head of the new Stellantis company, was planning to bring the Peugeot brand back to the United States.  I was looking forward to this, as Peugeot is the only French car brand I ever liked, and I was especially looking forward to hopefully checking out the new Peugeot 308 hatchback (below), assuming Peugeot would even bother with hatchback here, or at least a sedan based on the 308's platform.  Such a product, I thought, might tempt me away from Volkswagen - which VW has made a lot easier of late with its rotten product choices for the U.S. as it leans more and more toward SUVs.

When Tavares realized that he suddenly had more brands in the company than he knew what to do with, he concluded that offering one more European Stellantis brand in the United States at a time when Fiat is failing and Alfa Romeo is barely hanging on seemed to be a bit too much. So he canceled plans to bring Peugeot back to the States and has decided to concentrate on the future of the new company's four American brands - the amalgam of brands once known as the Chrysler Group.

Are you kidding me?

I mean, consider the four brands in question.  There are Jeep and Ram, the macho light-truck brands that offer pickups and SUVs that I don't want, and Dodge and Chrysler, which offer boring cars I don't want or, in the case of Dodge, muscle cars I wouldn't dare touch.  Jeep and Ram are obviously profitable for Stellantis, but Dodge and Chrysler have been starved for new product of late.  Tavares is particularly interested in rejuvenating Chrysler, which had been the flagship marque of the eponymously named company that created it before devolving into a nameplate mainly for luxury minivans, an oxymoron if there ever was one.    

Needless to say, I am bummed about Peugeot not coming back to the U.S. after all, because Peugeot has some really interesting  product with more to come in the future.  Also, the quality of Peugeot cars has improved dramatically since the brand quit the U.S. market in 1991, and if the quality of its cars is as good as my Peugeot bicycle - I particularly revere my own Peugeot ten-speed road bike, 26 years old and still going strong - I was definitely ready to consider a Peugeot as my next car.  So this news is a disappointment that has curdled into utter disgust.  Once again, I've found myself waiting for a moment that just won't come.

Okay, maybe Tavares can resuscitate Chrysler and give it better and more interesting product (no word on what happens to Dodge, though I assume its current positioning as a performance brand will be strengthened).  With a new administration in the White House focusing on increasing fuel economy, we might get smaller cars similar to the Peugeot 308, and with the growing importance of developing electric cars - the reason Fiat Chrysler and Peugeot merged in the first place, so, as Stellantis, they could afford to develop them efficiently - we could get electric vehicles from Dodge and Chrysler that puts Volkswagen's ID lineup to shame.  And yes, Tavares does plan to build up Alfa Romeo's presence in the U.S. (Fiat, I really don't care about.)  But I am not optimistic about how this is all going to turn out, particularly with Dodge and Chrysler.  Previous efforts at strengthening those brands haven't worked out so well.

I guess we won't get Opel back either.  

This is a shame, because the Corsa (above) is really cool.

But, Mr. Tavares, could you at least please start selling Peugeot bicycles in America again?

Hail Stellantis! 😠

Peugeot was supposed to come back to the U.S. in 2026.  Hopefully by then I'll be Paris checking out Peugeot cars on their home turf.  But I wouldn't bet on that either.

FCA + PSA

One story that slipped through the media in recent weeks due to the Trump impeachment inquiry is the announcement of a merger between Fiat Chrysler Automobiles (FCA) and Peugeot Société Anonyme (PSA), which would create the fourth largest automaker in the world, after Toyota, Volkswagen, and Hyundai - displacing the current fourth-place automaker, General Motors.  You only need to know all that to see what a game changer this merger will be.

PSA chairman Carlos Tavares (above) has promised that none of the brands sold by either company will be retired, particularly when the whole idea behind the merger is that each company is strong in some parts of the world but not others and they need to shore up each other.  And one big reason Fiat Chrysler and Peugeot need each other is because of the budding electric-vehicle (EV) revolution that's expected to blossom in the 2020s and beyond.  Both firms want to develop electric vehicles to compete with automakers already invested in the EV market, and neither one can do it alone.

Questions about the Peugeot brand's planned return to North America have arisen as a result of this planned merger, with some fearing that such a return was now less likely.  In fact, it now appears that Peugeot may return to the U.S. and Canada sooner than its planned 2026 return.  And that will certainly be good news for people who want more choices in the import-brand market, particularly when it comes to European brands.  It's not clear whether Opel, which PSA bought from General Motors in 2017, would return as well.

With Volkswagen's commitment to offering compact hatchbacks to its loyalist Europhile customers in America in doubt (no more base Golfs for us??) and its push toward more SUVs in America, Peugeot might tempt this VW boy in buying one of its cars, particularly if it were to offer a compact car like the 308 (above),  something I've already indicated before.  Of course, Peugeot would probably emphasize SUVs, too, but who knows - the new-car market could very well change by the middle of the coming decade. And it remains to be seen just what sort of electric vehicles the new company plans to produce, and for which markets.  Add a few unpleasant truths about the Peugeot brand - quality control that makes Fiats look bulletproof, the brand's emphasis on upscale cars rather than small volume cars when it last sold cars in North America - and you start to realize that how the brand will fare in the New World the second time around is anyone's guess.  Just don't expect big changes in the U.S. auto market right away, though; for now, the primary focus of the FCA-PSA merger is to concentrate on technology sharing and corporate integration.  Yet more unknown variables in the whole FCA-PSA equation, to be sure, but variables that will nonetheless keep me interested in the time to come.

And I just might buy a Peugeot car if it turns out that its quality has approached the level of Peugeot bicycles (I've had my Peugeot bike for 25 years).  I'd definitely buy another Peugeot bicycle, if they're ever sold in America again.  

The Opel Sale

If anyone ever asked me what my favorite General Motors car brand was, I'd never hesitate in saying, "Opel." 

This is the current Opel Corsa hatchback.  Can you think of any car as cool as this at your Chevrolet dealership?

But Opel, and its British cousin, Vauxhall (the Vauxhall brand, a separate entity within GM until the mid-1970s, is now basically Opel with a different name and with right-hand drive cars),  will be a part of the GM family no longer.  GM is selling its European operations to Peugeot for $1.4 billion.  The reason is simple - Opel isn't making any money for General Motors and hasn't been doing so for a long time.  Opel/Vauxhall sales for 2016 accounted for 5.7 percent of all new-car sales in the European market, and its biggest income came from Great Britain, which is leaving the European Union and has seen the pound sinking as a result.  Bearing all that in mind, GM CEO Mary Barra felt it was time to give up the ghost of Adam Opel himself (the company's founder began the business in 1862 making sewing machines, and later, bicycles before the car end of the business came along in 1899, after Adam Opel's death) and sell GM's European assets to Peugeot, a company that was at death's door after the 2008 financial crisis but has since bounced back handsomely.

This is ironic, because back in 2009, when GM was at that same mortal door, its then-CEO, Fritz Henderson, gave GM brass plans to sell Opel to a Russo-Canadian consortium in order to raise some badly needed cash.  The board of directors responded by giving Henderson the boot; surrendering its European operations was a bridge too far for them.  I could sympathize with that feeling.  After all, Opel has made some incredible cars in the 88 years that GM has owned it.  But it's made many lackluster cars as well, as any American who bought a Cadillac Catera (a rebadged Opel Omega) or a Saturn L-Series (a watered-down, American-made Opel Vectra) in the nineties would attest.  I, of course, still liked them, at least in comparison to other GM cars of the time.  But European consumers have found too many Opels of this century devoid of any meaningful pizzazz, and that lack of magic caught up with the brand. 

Will GM stop being a player in Europe completely?  Barra said that the company will still sell Chevrolets and Cadillacs in the Old Country. So, in other words, the answer is, yes, it will.  Chevrolets and Cadillacs have never been popular over there, and GM's sale of Opel and Vauxhall will diminish the already paltry presence of its American brands in Europe.

Call it "GMExit."  Anyway, GM will be concentrating on the Americas and China from here on, deciding that it doesn't need to keep a presence in Europe just for the prestige.

And what of Opel buyer Peugeot - whose volume car, the 308 (below) will likely be the basis for Opels to come?  What does Peugeot chairman Carlos Tavares get out of this?

Plenty.  He gets more capacity, a brand with a distinct identity thanks to its German heritage and its engineering history, a new crossover model, the Opel Crossland X, below (ironically, Opel's latest attempt to drum up sales in what is becoming Europe's most popular market segment) and the infrastructure that would be necessary for Peugeot to re-enter the United States, if it so chose.

Tavares does not so choose yet, but if he can get Opel and Vauxhall (assuming he even keeps the Vauxhall brand) to make a profit without closing any factories or laying off workers, as he says he can do - who knows?

It's going to be an exciting time for the global auto market coming up, and if Peugeot can pull this off,  it's going to be one of the most monumental feats in automotive history.

And Opel is still my favorite GM brand. :-)

Have a look back at nearly nine decades of GM's ownership of Opel here.