Noise Vibration and Harshness

French Automakers Are Back in the U.S.A, But Not How You’d Think

There are no French cars involved, for now at least

Carlos Tavares, head of France’s Groupe PSA and former number-two at Nissan, is a clever cookie. Nissan’s leadership would agree, even if it did summarily fire Tavares in 2013. But that was because he answered in the affirmative a reporter’s hypothetical question about whether he might be interested in a bigger job, say, righting General Motors, should the CEO’s role become open there.

His boss, the now-disgraced Carlos Ghosn, didn’t want to hear about an underling’s outsized ambition, so Carlos T. became a competitor. Soon after his trapdoor exit, a struggling PSA came calling for a new CEO, and Tavares accepted. He’s since proved his mettle, transforming the group—whose brands include Peugeot, Citroën, DS, and, lately, Opel and Vauxhall—into Europe’s second largest carmaker and returning it against the odds to profitability. Incredibly, the latter two brands, perennial money losers for GM, have gone into profit less than a year after PSA acquired them. Sales in Asia have grown significantly, and European buyers again see PSA’s cars as competitive.

Still, some American loyalists of Peugeot, Citroën, and Opel might see disappointment in PSA’s first step back into the U.S. market, from which it withdrew in 1991. The comeback vehicle is not even a car, but a mobility app called Free2Move. It debuted in Europe more than a year ago but launched in October in Washington, D.C., as its first North American test market. After a $10 sign-up fee, the app lets you book cars—all fuel, parking, and insurance paid, with no mileage restrictions—at an hourly rate (currently $13). Free2Move also lets you book bikes and electric scooters, plus ride-sharing services like Uber, with only one centralized login/billing system.

The most obvious problem is that there’s nary a Peugeot, Citroën, or Opel to be found among the 600 cars serving F2M patrons on the streets of our capital. As it gets the hang of the mobility thing, PSA says, it plans to use its own cars, which it’s homologating for U.S. use. And one day in the not too distant future, the company says, it will have chosen which of its car brands will once again represent it on American soil. And then PSA will for the first time in almost 30 years sell these cars direct to American consumers.

That’s a lot of blank spaces, you’d be right to observe, and yet after some thought I’ve concluded that PSA’s plan for America is nothing but smart.

To the greatest extent possible, a company entering a major market wants to control its own narrative, and for as long as possible. The market is cruel and impatient, and the public is all that and fickle to boot.

With its new strategy, PSA aims to stake itself not just weeks or even months to quietly fail or succeed, but years. Given the limits to PSA’s wealth and the rapidly shifting shape of the industry, a 10-year plan is a move that both markets and shareholders ought to applaud. Though of course if history is any indication, should the money not be there in the near term, Tavares will be gone, right or wrong.

PSA’s plan is the carmakers’ version of the Hippocratic Oath—do no harm. It unfurls slowly, with risks and costs that aren’t likely to spin out of control like a traditional launch with a dealer network and a full line of cars might. It doesn’t force PSA to create a dealer network here or some alternate distribution system that doesn’t exist yet or is instead fraught like Tesla’s—for a car that likely hasn’t even been designed.

With an initial focus on PSA’s becoming a mobility provider, it develops a potentially useful asset (and future built-in demand for its cars) while giving a strong nod to the forward thinking the markets want from car companies, bolstering share prices, one might hope. At the same time, it serves up few real stress tests for PSA to fail. Meanwhile, the company is on a fact-finding mission in North America.

Of course, PSA still faces all the hazards and pitfalls that confront smaller carmakers without true luxury brands. Its development budgets are fractions of Volkswagen’s, for example, and all this portends its ability to invest in product. But lack of money doesn’t necessarily impinge on the ability to innovate.

Take PSA at its word. It is getting prepared for a future as a mobility provider. Car-sharing, autonomy, electric cars, we’ll deal with it, it says calmly. We do know how to build a decent car, after all. Who we build it for and what exactly it will be like are questions that need answering.