As the European auto industry continues to disintegrate, PSA/Peugeot-Citroen has unveiled a new survival strategy: Embrace the fact that it doesn't sell enough cars, just convince people to pay more for them.
Of course. Why didn't Packard and Studebaker think of that?
Not to put too fine a point on it, but Peugeot wouldn't be in this fix if folks were inclined to pay top euro for its cars.
Why should you care? Because General Motors has tied its future to Peugeot. GM owns a piece of Peugeot. It's counting on joint engineering and purchasing with the French automaker to help save its German brand, Opel.
Opel itself spent the past few years trying to convince customers its cars were worth more than they'd been paying. That was one of the many failed stratagems that added up to $26 billion lost since about 2000, including $2 billion last year.
Peugeot lost $6.7 billion in 2012. It's Europe's second-biggest automaker, after the Volkswagen Group, but it can't go on like that for long.
Despite the long-shot nature of a plan that says fewer sales equals more money, there's some reason for hope. Peugeot pulled the trick off recently with its Citroen brand.
Citroen created DS, a sub-brand of small premium-priced cars that use the same underpinnings as its regular cars but offer more style and features. DS has been one of the European industry's few recent successes.
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