Peugeot’s Hopes Raised for Comeback in U.S.

French auto maker Peugeot SA, its minuscule presence in the U.S. auto market continuing to decline, is pinning hopes for recovery on a new model that Europe has named its car of the year.

The front-wheel drive Peugeot 405 is being offered in three models, but Peugeot officials, dealers and industry analysts agree that its most attractive attribute is its base price of $14,500.

“We think this car is very right for the marketplace. It is a range many of our European competitors have gotten away from,” said Bill Kelly, national sales manager for Peugeot Motors of America Inc.

The 405 models, built largely by robot at Peugeot’s Sochaux plant in eastern France, join the Peugeot 505, a basic mid-size sedan, which has been sold in the United States since 1980.

Sales of the Peugeot 505 have declined drastically in the past two years--from 14,431 in 1986 to 9,409 in 1987. Through the first seven months of this year, Peugeot has sold 4,015 cars, compared to 5,293 for the same period last year.

Kelly said the company has projected that it will sell 15,405 of the new Peugeot 405 models in the 1989 sales year and figures on selling 3,505 of the restyled 505 series cars.

Some Good Reviews

Peugeot’s three 405 models are the DL, ($14,500) the S (about $17,500) and the 16-valve Mi 16 ($21,000).

“They’ve priced it right and it has gotten some good reviews,” said Thomas O’Grady, an analyst with Integrated Automotive Resources Inc. in Wayne, Pa. “The things they’ve got to get over are marketing, positioning and advertising. They do have a history of product and dealer problems.”

Kelly said Peugeot will launch the most extensive advertising campaign in Peugeot history to bring the Peugeot 405 to the attention of the American public, especially the 25- to 49-year-old male who is making at least $40,000 a year.

While he declined to say how much the company will spend, Kelly said the target audience will see the Peugeot 405 an average of 29 times between mid-August and Nov. 1 on cable and network television, billboards and in magazines.

The Peugeot’s popularity has been mostly on the East Coast, but Kelly said that, in the long range, he thinks the front-wheel-drive 405 will find a home with proportionately more Midwestern owners.