The move has been welcomed by the industry as a potential harbinger of a new age of affordable city cars, with manufacturers including Dacia and BYD hinting at plans to launch tiny new entry models in the region.
Peugeot sibling Citroën has also suggested that a more hospitable regulatory environment could pave the way for a successor to the 2CV – and it’s likely that any Peugeot equivalent would be a close technical relation, as was the case with the 108 and C1.
But Favey emphasised that Peugeot would not consider re-entering the A-segment unless there was a new ruleset in place that meant it could make money.
“As long as there isn’t, I would confirm what my predecessor [ex-Peugeot CEO Linda Jackson] said, which is: ‘No, there is no space for an A-segment car today, as basically everybody is exiting that segment for the same reason, which is that there is no way to make such a car at such a low price profitable, as long as you have to put so much equipment on it’.”
Favey acknowledged the importance and relevance of the EU’s mandatory technologies and safety regulations but said they are incompatible with selling ultra-affordable cars.
“The safety features and driving assistance systems – of course, they all make sense but you need to be clear that people need to pay for them.” he said. “So as long as people are ready to pay for them, it’s fine, but then nobody should wonder why the European market is three million [cars per year] – lower than it was before Covid.
“If you have to keep putting on equipment that increases the price of cars, there comes a point when the cars become just too expensive for people to buy. And that’s when you should really ask yourselves: does that all make sense, or is there not another way where – for a specific part of the market, like the entry accessible cars – you create different conditions to allow for better products?”
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