PSA Peugeot Citroën Clarifies Strategy for Return to North America

If you were expecting innovation regarding PSA Peugeot Citroën’s recently announced plans to return to the Canadian and US markets, the strategy that the company’s CEO, Carlos Tavares elaborated upon in a Paris press conference on April 5, 2016 was a new direction for PSA, but one that is being pursued by other manufacturers worldwide.

Carlos Tavares NA announcement WS 4.5.16 Carlos Tavares – PSA Groupe CEO

Tavares stated; “We’ll start by being a mobility operator in North America.  This is the number one step. We will enter or re-enter the North American market by being a mobility operator which of course is a way to understand the customers, to understand the stakeholders, to understand the regulations, to make sure that we can completely feel the pulse of that big market.”  This sounded more like a like an outline that Apple’s CEO Tim Cook would give at a keynote presentation.  In fact, as Apple toys with the idea of moving into the automobile market with actual Apple produced vehicles, On May 10, 2016 the company announced a $1 billion US investment into Didi Chuxing, a major Chinese ride-hailing service.

While Apple’s rival Google other major automotive manufacturers like Ford, Toyota, Volkswagen and Chrysler are all focused on self driving cars, the goal is same; Take advantage of the sociological change where the automobile will no longer be individually owned but merely used a collaborative transportation tool that is summoned by those looking for mobility for the particular task at hand.  These companies are looking to take the Uber concept to the next level.  They want to be the fleet providers of autonomous driving vehicles for ride sharing

Arguably no company has been as bold in this endeavour as Mercedes Benz.  Not only are they leading in assisted driving driving technology in their C, E and S-class vehicles today, they have shown functional prototype vehicles such as their F-015 Luxury in Motion research vehicle that is not only full autonomous but refines the concept of the automobile as a mobile living space.

Mercedes-F-015 front side  Mercedes F-015  Mercedes-F-015-Interior  Mercedes-F-015-Interior dash  Mercedes F-015 rear side

While Mercedes continues to work on mass production logistics, they have cleverly taken their economy offerings in their Smart Car and B class models and created ride sharing programs in major cities across North America.  Along with their Car2Go initiative, where these cars are accessed via a downloadable smartphone app that lets customers can share them by the minute, hour or day, Daimler, which owns the Mercedes-Benz and Smart car brands, has acquired RideScout and MyTaxi to reach a new market of consumers who favour ride-sharing apps over owning a car.

In light of all this activity in ride mobility in North America, does PSA have a shot at making inroads here?  Tavares said that PSA is considering a strategic partnership arrangement in North America through their alliance with Bolloré, a French investment and industrial holding group.  Bolloré manufactures the Bolloré Bluecar, a small electric car, initially introduced in 2011 to showcase the company’s range of electric power cells.  The Bluecar has become the basis for the Citroen’s electrified revival of the Méhari.

e-mehari and old Mehari Citroën’s new e-Méhari and the original Méhari

However, the obvious flaw in the Bolloré strategy is that Bolloré is a French company without well established business in the North American market.  Tavares went on to say “Then from there we will have the opportunity, if we are successful being a mobility operator to put in our own fleets, our own cars.  As soon as they will be compliant with the US regulations we will have the opportunity to bring those fleets- of course those fleets will stay under our control – as it is normally in a car-sharing activity, and that we’ll have the opportunity to bring our own cars and make sure that they are meeting the expectations of the local consumers as a second step.”

Tavares’ solution is to be cautious about North America saying; “We’ll make sure that first we understand the customer, we understand the local customs, and the local conditions, the local regulations.  So this is something that represents for us a very significant decision.  It’s a ten-year project, so it’s going to be something that we will do over time.  We will come back to North America because we believe this is a place were we can make significant profit for PSA.  We are already as you know well, one of the major car makers in Europe, the second car maker in Europe.  We are growing profitably in China.  As you know well, the third big market on our planet is North America so we will come back to this market but we are going to do this over time, in a very thoughtful and step-by-step manner.”

Carlos Tavares NA announcement 4.5.16 Tavares emphasizing cautionary approach

It is highly doubtful that time is on PSA’s side.  If the plan is to import Chinese produced PSA products that can compete in cost and features of competitive offerings for North America, PSA is essentially on the same playing field over here as all the other Chinese automobile manufactures that are eyeing our market in the same fashion.

chinese-car-brands Some of the over 60 Chinese automobile brands

None have established any brand recognition with the mainstream 2020+ consumer in the North American market.  Not only will the established North American automotive manufacturers be targeting the same market, but Silicon Valley players like Google and Apple will be in the game.  And of course there’s Tesla…

So with innovative engineering no longer a distinguishing factor (with Citroën), essentially this means the success of Citroen or Peugeot vehicles over here will based on the public’s desire to be in a vehicle that has a unique degree of French flair.  We say; Good luck with that Carlos!


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