The Comeback Kid: 5 Questions With PSA Group NA CEO Larry Dominique

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PSA Group

Groupe PSA is home to two car brands emblematic of French industrial know-how: Peugeot, one of the first companies to produce and sell petrol cars at the end of the 19th century, and Citroën, whose avant-garde technologies in design and industrial processes revolutionized the automotive world from the beginning of the 20th century.

PSA Group, as it’s known in English, is plotting a comeback in the U.S. nearly 30 years after Peugeot’s, and nearly 50 years since Citroen was available. In the interim, PSA tried to right the ship in Europe, where auto sales had been in a funk for several years and competitive pressures among various state-assisted automakers are immense. Lately, PSA has added the Opel and Vauxhall brands (which were made and sold in Europe by GM), made a commitment to artificial intelligence, and made a strategic decision to re-enter the North American market.

As part of its PSA-to-the-USA comeback plans, the automaker has already established headquarters in Atlanta, introduced its Free2Move car-sharing service, and begun selecting vehicle models in Europe that would meet U.S. regulatory and legal requirements.

With the acceptance of its Free2Move brand around the globe, PSA North America is launching in the U.S. with a business strategy that blends its core OEM business with the expectation levels of consumers who have more transportation options than ever before. It has yet to confirm which car models it plans to sell, and which nameplates or brands will bring them, but has said its return across the Atlantic is a 10-year process that will bring new vehicles stateside by 2026.

Larry Dominique - President and CEO, PSA Group North AmericaTo lead that strategy, PSA hired veteran U.S. automotive exec Larry Dominique as President and CEO of PSA North America. Having worked at GM, Chrysler, Nissan and most recently as president of Automotive Lease Guide and executive vice president of TrueCar, he certainly knows the ropes and the market. “We have an opportunity to define ourselves, not redefine ourselves, with the American consumer,” Dominique told brandchannel.

He discussed the role of mobility in priming PSA’s auto relaunch in North America—a theme he will discuss at the upcoming Automotive CX Summit Series hosted by Thought Leadership Summits on June 19-21 in Marina Del Rey, California—in a Q&A:

Why are you leading your North America re-entry with a mobility service in Free2Move?

The world is shifting. Private car ownership is not going away, but for sure we’re seeing mobility as a service grow in high-density urban areas. We’re going to have a mobility solution for you. And by launching with mobility as we prepare for cars sales, it gives us an opportunity to understand the trends. We can start collecting a tremendous amount of data and start relationships with consumers in a mobility sense so when we start to sell cars, a subset of those consumers are going to be looking for our cars. Mobility without cars; mobility with our cars; and the third phase is retail. The gap from the second to phase could be zero, or it could be a year or so. We’re studying the market in detail.

What have you noticed so far about the U.S. auto dealership and customer experience, and how might that affect what PSA does here?

We believe the current model is extremely high-cost for [brands] and dealers. The average profit per new-car vehicle sold is a negative 421 dollars. We think that has to change. You can’t have a business model that survives only on service revenue. Consumer expectations re changing very rapidly and we want to meet those changing expectations.

How do you approach this from a brand perspective?

We have a global mobility brand referred to as Free2Move. In Europe it’s more mature. In Europe we have Free2Move car sharing and connected services. We have a multi-faceted or multi-modality mobility brand. You will see us focusing on developing that brand as an umbrella brand for mobility and then when we do bring cars to the U.S., they’ll be under one of our marques. But that said, our goal as a mobility provider is to have a connection between those two brands. We want you to have extremely flexible mobility when you need it, to give you easy access to technology how you want to access it.

What about America’s SUV focus? Will PSA be ready for that?

Two of the biggest auto segments in existence are still the C and D [size] sedan segments. They will evolve. Together they’re still 3.5 million annual sales in the US out of 17 million, so they’re still relevant categories. SUVs have become the lion’s share of volume. And full-size pickups are always a two-million segment. If you look at PSA’s global portfolio I don’t exactly have a full-size pickup truck and I won’t, at least initially, after entering the U.S.

We’re going to have to focus on the segment that makes sense for us. We have a lot of B, C and D segment vehicles. I’ll have the right vehicles for the right segments but we have to make sure they’re modified to meet US consumer needs. The proverbial joke is cupholders: In Europe there aren’t 7-Elevens with Big Gulps. But it’s the little things that make a difference to consumers.

How do current U.S. market dynamics affect your plans?

I think about North America, not just the U.S. The population continues to grow. Over the next five to eight years the volume of new-car retail is supposed to be fairly flat, 17 to 18 million units a year, which would imply that the number of vehicles sold per capita is going to drop. But in that context, we know that 90% of the people we’ve surveyed are saying I’d like to do most or all of my automotive transactions digitally. And we also know that 80% of those customers say there are a lot of physical touchpoints in that process, such as test drives and deliveries and service.

We believe the existing dealer network in the U.S. works fine but it’s not flexible and is extremely high-cost: showrooms, service facilities. So we believe the world has to be much more flexible for auto retailers—more technology-driven and smaller and maybe with more dispersed physical footprints. There clearly are opportunities for a greenfield brand like ourselves to do things differently because we haven’t built anything, including logistics and parts and services. Maybe when it comes to moving warranty parts around I don’t want to build warehouses and own trucks—maybe I want to partner with Amazon.


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