More Details of PSA’s Return to North America Announced

PSA’s CEO Carlos Tavares’ statement last year that the company plans to return to North America starting with car sharing garnered much skepticism. Will it be the way to entice North Americans to purchase product by exposing them to Citroën in hired rides? With no dealership network or the ability to build one quickly it may their only alternative, but will it work?

Tesla and Genesis have already but in place a personalized online means to purchase their products, supported by select showroom locations that re-enforce the brand by physical presence. If it is merely a ride sharing effort to establish Citroën or Peugeot over here, any other carmaker already established in the Canada and the USA can easily fill that void. Banking on the exclusivity of driving in a Citroën may not make distinction triumph over fleet disbursement of readily available brands that are already providing premium cars in droves to the rental car companies and are eyeing Uber, Lyft, Maven and other ride sharing start-ups.

Now, a year after PSA’s announcement, the ride-sharing service TravelCar will be launched at the Los Angeles and San Francisco airports in April. TravelCar currently operates in 10 European countries and has over 300,000 users, but this rental agency works differently from other airport rental companies – it rents out cars owned by other travellers. Those who lend their cars get free parking in exchange, and those who rent the cars pay about half of other companies’ rental rates, according to TravelCar.  

The new Citroën DS-7 Crossback, (and Peugeot 3008), introduced at the Geneva Motor Show this week, may offer some insight as to what PSA hopes will be in demand by TravelCar customers. Certainly a SUV is the trend these days. Will this business model fly over here with owners being cool that total strangers are using their cars while they are away on a trip? It’s hard to think that you are just going to toss the keys to you upmarket SUV to someone else so they can jaunt around LA.

 Citroën DS-7 Crossback

“We announced our progressive entry to North America by launching mobility services with our partners,” said PSA’s head of mobility services Grégoire Olivier on Feb. 23. “We deploy these services worldwide to meet customers’ expectations. With TravelCar today, we’re writing the beginning of this new step overseas.”

  Grégoire Olivier

With a dismal history in the North American market PSA’s shareholders are exuding a lot of confidence that the companies executives now have an understanding of the American market and an inkling of how to succeed.

PSA’s five-year strategic plan, “Push to Pass,” announced last year, outlined a 10-year strategy for re-entering the North American market. “PSA will not become a global company if it doesn’t come back to North America,” CEO Carlos Tavares said last April in announcing the plan. However automakers are moving rapidly to diversify their portfolios with car-sharing and other mobility businesses, with companies including Daimler, BMW and Volvo offering an array of options like “free float” sharing in major cities and business-to-business fleet services.

“We have clearly stated that mobility services is a second core business to the company, along with manufacturing, which is a very strong statement,” Christian Sere Annichini, PSA’s head of global car sharing and connect fleet business unit, said in a joint interview in Paris on February 23rd with Guy Bulaty, the chief operating officer of TravelCar.

   Christian Sere Annichini      Guy Bulaty

Bulaty said the United States market was crucial for TravelCar’s global ambitions. “We are going to the US to stay; this is a long-term movement from TravelCar in association with PSA.”

He acknowledged that other peer-to-peer car sharing services had failed to live up to their billing, but he said that TravelCar’s lean operations model and local partnerships with garages and other service providers would enable it to succeed.

“We analyzed them and we realized the reasons that these services ended up being closed down was not for the market potential,” Bulaty said. “Actually, they had a lot of growth, and the reason they didn’t work was for internal financial and operating problems.”

He said the US market had “solid fundamentals,” including the largest car rental market in the world and growth in both air traffic and car rentals. Lisa Jerram, a principal research analyst for Navigant, based in Washington, said it was not clear that the TravelCar/PSA venture would succeed where others have not.

“The thing about car sharing is that there are so many other models for how you can provide that service that I think have broader appeal,” she said. “It’s kind of a narrow group that A.) wants to share their car and B.) wants to get access to a car through something that’s very ad hoc.”

“I still think the preference for consumers is that either they are going to get the cars that are parked around town, like ZipCar and Daimler’s Car2Go, and AutoLib, in Paris,” she said, or through ride-hailing services like Uber or Lyft.

PSA is already involved in free-float sharing, PSA’s Annichini said, citing Moticity, which offers 350 Citroën vehicles in Berlin, and emov, a car-sharing plan in Madrid that was launched in December with 500 vehicles. The company is partnership with the French company Bollore in car sharing operations in Lyon and Bordeaux, France, and it has developed an application called Free2Move that lets users gain access to about 20 car sharing services. “Free2Move” will be PSA’s mobility brand.

Annichini said he would not reveal any specific metrics for success, but he said PSA was committed to re-entering the North American market. “In the US, this is a long term operation, it’s not making a quick test of the market,” he said. “From the start, it will be a TravelCar venture, and hence branding, but obviously any kind of development is open.”

And so we will see if this time PSA’s Citroën, Peugeot, Opel, Vauxhall or whatever models they want to deploy here have the corporate understanding, stamina and backing necessary for them to be in North America for the long haul.

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