The maker of Peugeot, Citroen, Opel and other brands announced Tuesday that it would open a new North American headquarters in Atlanta by February, adding Europe’s second largest car maker to the city’s list of prestigious foreign nameplates.
But according to the French company, this isn’t your traditional auto announcement; it’s in part a technology play, a gradual move into the U.S. market that will be calibrated based on real-time trends.
Unlike Mercedes-Benz and Porsche, foreign-owned brands that manage substantial existing sales from their newly built headquarters here, PSA’s brands are virtually unknown to the average American consumer.
For Larry Dominique, PSA’s North American president, that’s an advantage in an industry dealing with rapid changes to the traditional sales model.
“I have no market share to protect,” he said.
As part of a broader global strategy, PSA in April 2016 announced a three-step plan for North American market entry, starting with an app that makes car sharing easier.
Free2Move aggregates auto, scooter and bicycle sharing platforms, letting consumers discover and book them in one place. Already used in nearly 20 cities in Europe (with a half-million users in Madrid alone), it launched in Seattle in October and will be rolled out to other U.S. cities in the coming months.
While Free2Move is a standalone business, it’s also a first toe in the water for PSA, to be followed by its own car-sharing or subscription service that will help introduce PSA’s diverse brands to consumers.
These services and subscription platforms like the recently launched Porsche Passport in Atlanta also more data for car companies. And that’s what PSA will use to finetune its approach as it takes time to adapt its European platforms for U.S. regulations, Mr. Dominique said.
The company also aims to rethink the traditional American approach to dealerships, meeting the needs of the digitally engaged consumer without the costly encumbrances of massive showrooms and sprawling lots.
While PSA will likely be forced through franchise laws to have some sort of physical space — it has no intention of repeating Tesla’s legal fights — he still sees the experience as ripe for disruption.
“It’s not saying you can divorce yourself from physical — you can’t — but it doesn’t mean you have to build these Taj Mahals,” he told Global Atlanta, referring to the dealerships he sees lining metro Atlanta highways.
Mr. Dominique sees a future where consumers pick out their cars online or in digitally enabled showrooms, where cars can be delivered to an office for a test drive. PSA could cut distribution costs by streamlining service and parts delivery through outside partnerships.
“I have an opportunity as a clean sheet of paper: Why do we have to build it all ourselves? Why can’t I just partner with great people?” he said.
Tie-ups in the auto sector — Uber and GM, Lyft and Ford, Waymo and Chrysler, to name a few — are becoming more common as it becomes more clear that technology giants are invested in mobility for the long haul. Cars are becoming smarter and more connected with both their owners and the world around them — and that requires marrying traditional hardware manufacturing knowhow with the latest in technology.
“Everyone’s teaming up so that they have both the software and information as well as the hardware,” says Mike Stonecipher, an auto industry veteran who works as a consultant in the Enterprise Innovation Institute at Georgia Tech.
In a fast-moving environment reminiscent of the early days of auto innovation, the playing field is being leveled, and it’s the innovators with the best blend of service and connectivity who will win, Mr. Stonecipher says.
Why Atlanta?
Partnerships were one key reason Groupe PSA chose Atlanta after a year-long search that started with 50 cities.
The final four were about the same in terms of intangibles, Mr. Dominique said, but Atlanta had the “balanced culture” the company was looking for. PSA wanted a place with a “car culture,” but also one that is forward-thinking on how people get around.
On the latter point, Mr. Dominique said PSA was impressed by the City of Atlanta’s smart-city initiatives, particularly the North Avenue Smart Corridor project, where the city is partnering with Georgia Tech to use artificial intelligence and sensors at intersections to improve traffic flows. PSA was excited to learn that the city was planning to offer APIs that allow software and app developers like Google Maps to tie into the city’s central data system.
A diverse, collaborative and open business community with “cross-company camaraderie” was a draw, he said, praising the joint effort by the state of Georgia, the City of Atlanta, the Metro Atlanta Chamber and Georgia Power.
John Woodward, director of foreign investment who worked on the project for the chamber, said the company’s experience shows how valuable it is to draw on the “deep bench strength” of Atlanta’s prominent brands.
“When we bring in a prospect, it does help tremendously to introduce them to other successful executives from the metro Atlanta area, so they’re hearing from them directly rather from us,” Mr. Woodward said. “It helps tell our story.”
And with projects getting more complex and competition getting more intense, it’s becoming more important for cities like Atlanta to show how its industry strengths feed off each other, he said.
“We have people on staff for specific industry sectors, and we’re finding they’re working more and more together because the clusters are not siloed,” said Mr. Woodward. “There’s an intentional crossing of these lines. It’s incumbent upon us to address that.”
Mr. Woodward, who visited the company in Paris with a delegation of Georgia and Atlanta officials, said the conversation moved from Atlanta as a hub for the auto sector quickly to its strengths as a tech hub. Gov. Nathan Deal made a visit of his own in October, quietly calling on the company’s headquarters.
Atlanta has seen its share of French tech interest, from Airbus opening its drone intelligence unit here recently to a sister-city startup exchange with Toulouse now in its second year.
Marie Laumont, executive director of the French-American Chamber of Commerce in Atlanta, has a nostalgic connection to PSA’s brands.
At 18 her first car was a Peugeot 205, she told Global Atlanta, adding that Citroen, a classic French brand also under the company’s umbrella, had undergone a lot of improvements in recent years.
Robert Blumel, Atlanta director for Business in France, a government agency that helps French companies expand abroad, also welcomed the news of PSA’s arrival, seeing it as validation that French companies are on the forefront of auto trends. (Mr. Blumel, coincidentally, did his MBA thesis at Northwestern University on Mercedes-Benz’s approach to autonomous vehicles.)
Mr. Dominique said he is always seeking introductions to potential Atlanta partners, from startups to established players like his own company, with more than 200,000 employees worldwide.
PSA is in now operating in the WeWork shared office space in Midtown, but it will scour locations inside the city limits for the best site, potentially looking at areas in need of redevelopment, he said.
He couldn’t put a number on the jobs that will eventually be created, other than promising “dozens and dozens” to eventually fill in traditional roles as the company’s strategy is carried out.
The first hires, however, will be ”key mobility people” who sit at the intersection of cars and technology.
As for setting up a U.S. plant, Mr. Dominique can foresee that happening as growth makes it more economical, but that would be far into the future, he said.
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