Peugeot On The Go

After resurrecting the French carmaker Groupe PSA, Carlos Tavares is taking on the global giants by gambling on bleeding-edge manufacturing techniques and selling services that support other companies’ cars.

 

- Joann Muller

Quick: What comes to mind when you think of the French carmaker Peugeot? Quality? Probably not. Performance? Um, unlikely. How about innovation? Doubt it.

So you’ve got to appreciate the candor of Carlos Tavares, the chief executive of France’s Groupe PSA, which makes Peugeot, Citroën and DS brand vehicles and ranks a distant tenth globally in terms of vehicle sales. “We are dinosaurs,” he says plainly of his 207-year-old company, which produced coffee mills and bicycles before automobiles. “And if we don’t want to disappear like dinosaurs, we have to operate in a different way.”

How can a second-tier French car company compete in the age of Uber and Tesla? Tavares’ strategy is twofold. First, cutting-edge efficiency.

Spend wisely, but take chances on emerging manufacturing methods like 3-D printing and embrace unconventional business opportunities, like selling cheap, generic vehicles to car-sharing services. Second, an expanded customer base. PSA would like to turn occasional car buyers into lifetime transportation subscribers through its Free2Move service, which aims to be a single, worldwide app supporting everything from car sharing and leasing to corporate-fleet management. Importantly, Free2Move will not be limited to PSA’s brands, and it is the Trojan horse for Tavares’ plans to reenter the American market, where PSA hasn’t sold cars for 26 years.

Unsexy? Yes. But it’s a clever way of playing a bad hand by one of the auto industry’s most thoughtful leaders. And it just might work.

After all, Tavares has a way of making things happen. Once a top lieutenant to Renault-Nissan Alliance chief executive Carlos Ghosn, Tavares was famously out of a job after telling a reporter in August 2013 that he wanted to be a CEO. He got his wish: A few months later, he was chosen to run a nearly bankrupt PSA.