In 2008, seven years after setting up its first plant in Brazil, France’s Peugeot launched the 207, a car inspired by a model manufactured in Europe with the same name. The difference is that the Brazilian version was simpler. The plan was to adapt a European automobile to an emerging market and compete in the 1.0-liter segment with automakers that had arrived here before. But the French brand’s market share in Brazil has never gone much beyond the 1.3% achieved last month.
Almost ten years later, Peugeot global CEO Jean-Philippe Imparato acknowledges that the strategy was wrong, and promises that from now on Peugeot cars sold in Brazil will be the same as those of Europe. “There is no reason for a different range. There is no small country, small region or small client,” he says. Mr. Imparato has been working for the PSA group, which controls Peugeot and Citroën, since 1991. But when the strategy to align the Brazilian line to cheaper models was launched, he was Citroën’s sales head in Italy.
The French executive of Italian descent says that he sees in Brazilian consumers several similarities with the car-loving Italians. “In many countries customers who can buy cars want better, beautiful products, and are ready to pay for it.”
By “forgetting its story,” as Mr. Imparato says, Peugeot has moved away from customers. But this has not happened in Brazil alone. The new strategy aims to raise Peugeot’s sales share outside of Europe through 2020 to 50% from 42% in 2016. Iran is already a bigger market for the automaker than France. A new pickup truck was launched in Tunisia a few days ago, and in ten days a van manufactured in Uruguay will be launched on the Brazilian market, in partnership with local producer Nordex.
The mission to lure Brazilian consumers is headed by Ana Theresa Borsari, director-general of Peugeot do Brasil since October 2015. Strengthening the utility segment is one of her missions, and Expert, the van manufactured in Uruguay with capacity for a ton and a half of cargo, leads Peugeot to a new segment.
More than half of the carmaker’s dealership network has been renewed. In an attempt to “put an end to the myth that French-brand cars lose more value”, says Mr. Borsari, the company launched a loyalty whereby the dealer agrees to buy the vehicle when customers decide to exchange it for a new one.
On a visit to Brazil this week, Mr. Imparato dined with car dealers and heard several sad stories of the economic crisis. “These people who have lived through hell now look at the future with confidence,” he says. The executive plans to reverse Peugeot’s losses in Brazil in five years.
In Brazil, the PSA group manufactures Peugeot and Citrioën vehicles at a plant located in Porto Real, Rio de Janeiro, opened in 2001. Last year, PSA had a R$206.3 million loss, according to the balance sheet published by the carmaker in the Official Gazette of Rio de Janeiro. According to Peugeot, the group is profitable in Latin America. Mr. Imparato says that, in this industry, nobody can afford losing money. “If you lose, it’s time to change the business model.” he says.
On the eve of a change in the Brazilian auto sector’s industrial policy, the French executive supports less protectionist programs. “I believe a ‘grain’ of market liberalization would be good for the country.”
Source: Valor Econômico