Industry News: PSA Group Wants To Make It Affordable For Dealers To Sell Vehicles

[William Maley]

PSA Group's decade-long plan of possibly returning to the U.S. continues forward and they are facing their next roadblock, setting up a dealer network. Trying to convince dealers to sell brands that haven't been sold since the early nineties. But the French automaker believes they have a solution, using a tech-centric approach that will be affordable.

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

"We need to find a way to reduce our fixed costs. We want people to make a profit selling a new car."

A possible strategy could look similar to Hyundai's Shopper Assurance where a customer can do a number of tasks at home such as scheduling a test drive, apply for financing, and complete paperwork. There are things that will benefit from a physical presence such as service and vehicle delivery. Dominique said that he will not be asking those who decide to sell whatever brand PSA Group has in mind to go crazy with building a facility.

The bit about making a profit with selling a new vehicle is important here. Data from the National Automobile Dealers Association reveals that new vehicle losses for dealers rose $22 per car in 2015 to $421 in 2017. Used cars got hit worse with dealers losing $2 per car in 2017, from making $132 only three years ago.

Source: Automotive News (Subscription Required)

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[David]

Right now I see no reason for PSA to sell here, their quality of auto is piss poor like Fiat and Alfa. 

Why would anyone want to go to a lower quality auto?

[smk4565]

What they should do is dealers should keep like 3 examples of each model, for test drive purposes, and then people just order what they want off the computer and it arrives 2-3 weeks later.  I don't know why car companies don't do this.  Tesla actually has that strategy, except they can't build the cars.

[balthazar]

Thusly; Tesla doesn't have that strategy.

OEMs cannot wait until someone orders a car to build ALL their cars; some folks need cars immediately, some don't care enough to order, and the production schedule must be moderated at the factories. Cars are not cups of coffee.