Peugeot pulled out of the Mexican market in 1963, but now Mexico is the only Latin American or Caribbean nation in which the company does not have a presence. Peugeot hopes to begin selling cars here as of the fourth quarter of this year.
With the launch date still not set, Peugeot has not yet fixed its ad budget, says Guillaume Couzy, Latin American advertising manager. "We are still negotiating internally," he says, but he indicated that in 1997 the company may allocate between $700,000 to $1m. "Obviously that means a higher budget for 1998."
Peugeot invited three agencies to compete for the account. Betancourt Barba Euro RSCG ultimately edged out ADD Advertising, a division of Young & Rubicam, Couzy says.
Peugeot uses Euro RSCG as its agency in much of Europe, but not exclusively in other parts of the world. It uses Euro RSCG in Chile but, for example, not in Argentina and Brazil - the biggest South American markets, says Mexico City agency Director General Jose Luis Betancourt.
The Euro RSCG connection was a point in the winning agency's favor, but the two finalists presented "very good" proposals, Couzy says.
The Mexican car market is dominated by the U.S.' big three and Germany's Volkswagen - all of which produce here - and is still suffering from the effects of the December 1994 peso crash. However, high-end European cars such as Mercedes-Benz and BMW have also made in-roads, notes Betancourt.
Indeed, the French do not expect to conquer the market. "We believe our brand still has a strong image and good reputation in Mexico," Couzy says. "We plan to target that niche, the small segment of the market that appreciates European taste and culture and will buy an imported car."
Peugeot cars sold here will be made in the company's Chilean plant, taking advantage of the free-trade agreement between Mexico and Chile.
Copyright August 1997, Crain Communications Inc.