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Peugeot's pay-more strategy boosts GM

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By Mark Phelan
Friday, March 8, 2013, 5:24 p.m.

As the European auto industry continues to disintegrate, PSA/Peugeot-Citroen has a new survival strategy: Embrace the fact that it doesn't sell enough cars, just persuade people to pay more for them.

Of course. Why didn't Packard and Studebaker think of that?

Why should you care? Because General Motors has tied its future to Peugeot. GM owns a piece of Peugeot. It's counting on joint engineering and purchasing with the French automaker to help save its German brand, Opel.

Opel itself spent the past few years trying to convince customers its cars were worth more than they'd been paying. That was one of the many failed stratagems that added up to $26 billion lost since about 2000, including $2 billion last year.

Peugeot lost $6.7 billion in 2012. It's Europe's second-biggest automaker, after the Volkswagen Group, but it can't go on like that for long.

Despite the long-shot nature of a plan that says fewer sales equals more money, there's some reason for hope. Peugeot pulled the trick off recently with its Citroen brand.

Citroen created DS, a sub-brand of small premium-priced cars that use the same underpinnings as its regular cars but offer more style and features. DS has been one of the European industry's few recent successes.

‘Smart' stuff

You've heard of the Smart car, but how about the smart vent? It's a feature Chevrolet engineers developed to save weight and make it easier to close the cargo hatch of the new 2014 Corvette.

Smart materials are specially treated so they have useful properties. The irradiated “memory metals” that make some eyeglass frames nearly unbreakable and help them retain their shapes after being sat on are an example.

In the case of the Corvette, a wire of memory metal attaches to a panel in the rear deck.

An electrical signal changes the wire's shape to open the vent when the hatchback is open. The vent allows air to escape and makes it easier to close the hatch. Then the wire returns to its original shape and pulls the vent closed. The system weighs about 1.1 pound less than a motorized control to do the same thing.

GM says about 200 motorized parts on an average car could be replaced with memory metal.

Hopped-up hatchback

Next stop, SEMA? You may never have thought you'd see the king of luxury brands amid the compact tuners, bikini models and LED valve stems at the Specialty Equipment Market Association Show, Las Vegas' annual tribute to automotive excess, but the Mercedes-Benz A 45 AMG hot-hatchback might be at home among the show's tweaked Ford Fiestas, Hyundai Velosters and Honda Civics.

The A 45 AMG features all-wheel drive, a seven-speed dual-clutch transmission and 360-horsepower turbocharged 2.0-liter engine.

The three-pointed Mercedes star is a classic, but I can already hear a shade-tree tuner pondering how much better it'll look backlit with neon.

Mark Phelan is the Detroit Free Press auto critic. He can be reached at

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