Which brand PSA Group will choose to sell in the U.S. by 2026 will be decided next year, and engineers in Germany have begun work on ensuring the future models meet North American regulations and tastes.

DS or Peugeot are most likely. Alternatives include Citroën and now Opel and Vauxhall after PSA bought the U.K. brands last year from General Motors for about $2.5 billion. Opel is the least likely candidate, as the plans to return to North America began before the acquisition and the brand would have too much overlap with existing GM models, especially Buick models created on Opel platforms.

PSA is using the former Opel engineers based in Rüsselsheim to work on next-generation models for the U.S., and they began their work a few months ago, said Carlos Tavares, CEO of the PSA Group since 2014. He thinks their engineering combined with the emotion of French brands will resonate with American buyers.

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Research shows the three French brands have a positive connotation in the U.S., associated with fine wines and cool design even though the products have not been sold on this side of the Atlantic for a long time. Citroën left in 1974, and Peugeot left in 1991. The attractive vehicles should resonate in North America much like they have in other markets, but Tavares said PSA must not be so arrogant as to think success in Europe guarantees success on this side of the pond. So he is being deliberately slow and careful in the rollout.

"Our heritage is French brands, that's a differentiator for us," said Larry Dominique, president and CEO of PSA North America. "We have done the research. We know directionally what we want to do," and they have the time to ensure they understand the market and their brands' position in it.

The brand coming to the U.S. has been essentially chosen, but the final decision will be made in a year, Dominique said, allowing time to continue to monitor the market and the product development efforts. Peugeot has the most recognition, he said. Past comments and speculation have centered on DS. There has been talk of a return to North America for years; at one time the plan was to sell Citroën in Canada first as a test bed.

The latest plan is a 10-year, three-phase re-entry to both the U.S. and Canada with sustainable retail sales no later than 2026. High volume is not a criteria.

The first two phases are car-sharing services using competitive vehicles initially and then PSA models. The final stage has retail sales of the yet-to-be named brand.

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Step one uses the car-share app Free2Move that is a global app with 600,000 users but only a few thousand in the U.S., where it has not been marketed, Dominique said. It is like Expedia for car-sharing, allowing access to ZipCar, Car2Go, and other sharing partners, and it will use vehicles from other automakers. It will start in a large East Coast city in a few months and expand to a few more U.S. cities later this year.

PSA has a separate partnership with Travel Car, a peer-to-peer rental app already available in Los Angeles, San Francisco, and Chicago with Seattle to be added soon. It books other people's cars and also finds and books discounted parking.

Car-sharing with a fleet of existing Peugeots could happen as early as next year, giving PSA control over the fleet.

The third phase is deciding the best brand to bring to the country and how to sell them, Tavares said. He would not say if it is a luxury or more mass-market brand. And they are looking at sales through traditional dealers, online, using a subscription model, or a combination of distribution models.

"The risk is to do things poorly," he said. "Because our company is profitable and healthy, we don't need to rush." Tavares does not want to repeat mistakes of some past foreign automakers entering the U.S. market unsuccessfully.

"The U.S. market for PSA is only about upside, so I don't have to be fast," Tavares said. "So the number one criteria is to do it well."

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Tavares also said that by 2025 all PSA vehicles will have some form of electrification-either full battery electric or plug-in hybrid—as an option on all of its 40 vehicles. Gasoline and diesel engines will continue to be options. Several second-generation all-electric models are launching next year, but Tavares does not know how many models will be pure electric by 2025.

By 2030 the automaker will also be offering some degree of autonomous vehicle technology on 80 percent of its vehicles, and 10 percent will be Level 4 or 5, which means the cars are capable of self-driving. Level 1 started with the Peugeot 3008, and Level 2 technology is in the new DS7 Crossback. Level 3 will be on the road in 2021-2022 followed by Level 4 by 2023.

The French automaker is financially healthy, and turning Opel around is a priority. Tavares said vehicles on GM platforms will migrate over to PSA architectures as each model completes its current life cycle, a process expected to take three or four years. It raises uncertainty for GM products such as the Buick Regal, which rides on an Opel platform.