Carless in Seattle: Peugeot and Citroen Are Back in America, But Only with a Mobility App (So Far) ""

By | October 6, 2017

2017 Peugeot 3008 and 1953 Citroen 2CV

France’s PSA Group is on the cusp of what amounts to a giant do-over. Among brands under the company’s control, Citroën hasn’t been in the U.S. market since the mid-1970s, and Peugeot shipped out after 1991. Both brands once may have been known as stylish, but they weren’t able to overcome their quirkiness to gain wider American acceptance. Yet by now, the forgiving warmth of nostalgia—and, well, a couple of younger generations—give this automaker what’s effectively a clean slate.

With that slate, PSA is relaunching in North America. And it kicked off Phase One earlier this week in Seattle, not with the launch of a car or even a specific service, but with an app. Called Free2Move, it’s a personal-transportation aggregator, simply showing which ways of getting around are available nearby, and it includes suggestions for multiple modes including electric vehicles, bikes, and scooters.

In a nutshell, think of it as an Expedia for getting around a city without your own car. In the seven European countries where Free2Move is already established, the service includes 24 car-sharing operators. Current U.S. partners will include car sharing from Zipcar and Car2Go and bike sharing from LimeBike, Ofo, and Spin. Within Seattle, for instance, Car2Go will be the best option for many doing one-way trips, while Zipcar will likely be the better option for round-trip journeys, and TravelCar will soon be a resource for airport rides. You can connect those accounts, so it’s all truly on one app.

Especially considering that Free2Move isn’t branded in any way with PSA or its badges, the list of partners seems inherently puzzling. Many of the car-sharing companies are owned by automakers and thus have their preferred car brands: Car2Go, for instance, has Smart and Mercedes-Benz; ReachNow has Mini and BMW; and Maven is General Motors’ own service. So why would PSA invest in assisting other automakers?

Aiming for “Transportation Consumers”

It’s very strange for a carmaker to say we’re ready to become a multi-brand operator,” said Brigitte Courtehoux, PSA’s senior vice president of mobility. “We are the first very openly saying, ‘In Europe, we want to have our car but we want to have, say, GM cars as well.’ ”

Courtehoux said that Free2Move is hoping for several million users within the next two years and explained that its goal is to guarantee customer mobility. “We might not be able to answer the customer with [only] one solution, so that’s why we want to guarantee a solution. Success will come if the customer is using the app for all of their solutions.”

Free2Move appFree2Move has already found some measure of success in Europe, where PSA is the second-largest automaker with a market share of about 17 percent as of the first half of this year. The mobility venture sees its own operations split into two areas: end users and corporate customers. In Europe, the Free2Move mobility-services app already has 400,000 end users, while the Free2Move car-sharing service that served to launch the brand has a million users. On the corporate side, a Free2Move Lease service has arranged 400,000 multiple-make leases, while the company recently launched a Free2Move fleet-sharing service and has 400 customers and 60,000 cars in a fleet-management service called Free2Move Connect Fleet.

A Major Global Carmaker, Don’t Forget . . .

The iPhone app names GHM Mobile Development as the developer/seller, and, at least from a U.S. user standpoint, there’s no mention of PSA vehicles. Beyond that and the roomful of people it might take to maintain and grow, PSA has a hold well beyond Europe; it’s on the top-10 list of the world’s largest automakers. PSA is far larger than Tesla, for instance, a company that has managed to set up retail stores and a massive Supercharger charging network. Yet Larry Dominique, president and CEO of PSA North America (and formerly an executive at Nissan and General Motors, among others) preemptively quipped that PSA doesn’t have close to their budget—or their stock value. As of December 2016, prior to its acquisition of Opel and Vauxhall from GM, PSA had more than 170,000 employees worldwide, and it posted 3,146,000 annual sales globally.

“We realize we have one chance to do this right.”

— Larry Dominique, PSA North America 

The Tesla questions that Dominique is already used to deflecting aren’t far off the mark; while his company might have the resources of a global automaker, it must go about establishing a way of selling, servicing, and supporting a brand that has zero on-the-ground footprint in the United States.

And the vehicles really are on the way, according to PSA group chairman Carlos Tavares, who said in September at the Frankfurt auto show that the company is in the process of homologating models for the U.S. market. “So within a few years,” Dominique said in Seattle, “we’ll have a portfolio of products available that we could bring to the United States when we’re ready,” adding the company has not forced them to meet a set timeline. “We realize we have one chance to do this right. So we’ve got to find the right solution that allows us to integrate the technological aspect, which is mobility and Free2Move, with innovation in the distribution sense.”

DS 6

The DS 6, product of PSA’s high-end DS Automobiles division, has been popular in China and could very well be coming to the U.S. market.

Dominique says that while nothing that PSA sells today is U.S. ready at present, the products are all competitive with top brands globally, and it will take relatively minor changes to get them ready. “The cliché is the cupholder,” Dominique said with a grin, adding that PSA is “going to make sure that the cupholder can hold a large cup of coffee—actually two large cups of coffee.”

PSA has hired a chief technology officer for the United States, Ben Winter, formerly a chief engineer at Ford and FCA. “Ben is working vigilantly with the engineering teams to make sure all of our needs are met, not just for regulatory but consumer needs,” said Dominique.

France Is a Good Place to Start

This time around, from a branding point of view, French brands don’t carry negative baggage, letting PSA start back in the U.S. market with “positive brand momentum,” Dominique said.  “We have to make sure the powertrains are correct, and the little things: that the HVAC system can cool the car as fast as guys in Nevada want it to and heat as much as people in Minnesota need it to. Regulation aside, it’s things like how does the seat mechanism work, do we have the right room in the back of the vehicle?”

The company has identified key segments for the U.S. market, among them compact sedans and SUVs, mid-size sedans and SUVs, and a compact hatchback. Tavares has said that every basic product category will have electrification. Displayed at the event announcing Free2Move’s U.S. launch were the Peking-to-Paris 1953 Citroën 2CV (below), which was on loan from America’s Car Museum; a 1960s Citroën DS21 cabriolet; and the new Peugeot 3008 (shown at the top of this story), which holds the title of 2017 European Car of the Year.

Citroen 2CV

Many Americans think of this iconic 20th-century people’s car, the Citroën 2CV, when they think of French automobiles. This one is from 1953.

There have been more than a few hints that PSA plans to enter the U.S. market with its high-end DS brand, which has already fared well in China. Dominique wouldn’t offer more on that topic but assured us that the brand entering the U.S. market will build on heritage and brand equity and will be one of PSA’s existing brand entities—not the freshly acquired Opel or Vauxhall brands. “We’ve done that analysis, we’ve made that decision, we’re just not telling anyone yet,” he said.

The company sees it all as being part of the PSA Group’s 2021 plan, in which the automaker goes from turnaround mode to a period of sustainable growth and its operations bifurcate into carmaker and mobility-provider roles. PSA aims to become “the preferred worldwide mobility service provider” by 2030, citing Deloitte University projections that shared-mobility vehicular transport will surpass personally owned transport before 2035.

Where’s the Money?

PSA held this first North American event at the Center for Innovation in Seattle—made possible by a donation from Amazon founder Jeff Bezos—because of the level of innovation that has come from the city, which remains a potential location for PSA’s North American headquarters when it ramps up operations.

PSA Group - Free2Move launch

To that end, the company claims that it will make some revenue through Free2Move via partnerships and joint ventures, but without its own vehicles in the mix in the near future, it’s hard to see where the revenue is in such an aggregation model. “The reality with most aggregation [is that] it’s about scale. As we scale and have more partners and customers, the revenue will grow,” Dominique said.

Dominique (pictured above), who expressed a keen interest in getting to the stage when the company can talk freely about the cars, noted that PSA currently has “the luxury of launching as a service provider, and I joke that selling cars will be the exclamation point at the end of [our] sentence.”

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