PSA stakes its U.S. return on mobility

TRAVERSE CITY, Mich. -- PSA Group sees its North American return as a chance to transition to a mobility-first business.

The French automaker will seek to forge strong ties with U.S. consumers with a service that coordinates various forms of transportation in one app, Larry Dominique, head of PSA North America, said Wednesday at the CAR Management Briefing Seminars.

Once PSA has established itself as a reliable mobility provider, selling cars will become secondary.

“We’re going to be starting to engage with millions of Americans,” Dominique told Automotive News separately. “By the time we’re ready to sell cars, selling cars will just be the exclamation point at the end of the sentence.”

Dominique, a former executive at Nissan and later at TrueCar, was named to the job in April. 

FROM OUR ARCHIVES: Peugeot's U.S. return to be led by former Nissan exec Dominique

As the future of traditional car ownership comes into question with the rise of ride hailing, car sharing and other services, automakers are looking to alternative revenue streams. To pivot successfully, experts say, manufacturers need a better understanding of consumer preferences and provide useful services.

“Car companies don’t understand their end customer,” said Samit Ghosh, CEO of consultancy P3 North America. “The user experience is a piece that a lot of companies overlook.”

PSA’s Free2Move app, which has launched in Europe and is to expand to China and North America, enables the automaker to interact with consumers more often than engaging solely in car sales, Dominique said. It adds value by coordinating services on one platform.

“The reality is, we tend to step in and step out of consumers’ lives, from an automotive point of view,” he said. The rise of mobile phones and transportation apps such as Uber and Lyft has created an opportunity for companies to communicate with customers.

Free2Move is an aggregation platform that enables users to book and pay for a variety of transportation services, such as ride hailing or public transit, with one mobile app. In Europe, the app coordinates about eight mobility options.

Dominique said the platform appeals to transportation providers because it increases exposure to new customers. The Free2Move app is free to use, but Dominique said PSA can strike revenue-sharing and other profit agreements with providers through the platform.

In addition to increasing customer engagement, operating as a mobility company comes with significantly lower costs and higher profit margins.

“The beauty of the technology is that it’s easily scalable,” Dominique said. “It’s much cheaper to produce software.”

Cracking North America is crucial to PSA’s future. Not being strapped with heavy upfront capital costs will be key.

“We’ve got to be able to do things in a new, innovative way,” Dominique said. “I don’t have the infrastructure and the legacy in place. We have a chance to do this right once.”