THEY SAY

CEO AND CHAIR­MAN, GROUPE PSA

Motor Trend (USA) - - Contents -

IN­TER­VIEW Car­los Tavares, CEO and Chair­man, Groupe PSA

Car­los Tavares is good at shak­ing up the auto world. He left the No. 2 spot at Nis­san Re­nault to be­come CEO of Groupe PSA in 2014, tak­ing the Peu­geot, Citroën, and nascent DS brands from near death to a 7.3 per­cent profit mar­gin with no debt. Then he bought the ail­ing Opel and Vaux­hall brands from GM with plans to make them prof­itable in four years. He ex­pects the larger PSA to grab 17 per­cent mar­ket share in Europe. Once that’s ac­com­plished, Tavares plans an ex­pan­sion into the U.S.

What can you do with Opel that Gen­eral Mo­tors could not? Ev­ery­thing I see at Opel is ex­actly the same thing as what we had at PSA four years ago. When you look at the num­bers, it’s strik­ing. The man­u­fac­tur­ing costs of the U.K. plants is dou­ble the man­u­fac­tur­ing costs of the French plants. We gave our Opel teams the bench­marks, line by line, func­tion by func­tion. They say, “OK, if the French guys did that, we can do it.” We also moved the de­ci­sion cen­ter not from Detroit to Paris but from Detroit to [Opel’s base in] Rüs­selsheim, [Ger­many]. We are giv­ing th­ese peo­ple breath­ing room to con­trol their des­tiny by com­ing up with ideas to im­prove the prof­itabil­ity of their com­pany them­selves.

At what point can GM no longer use Opel plat­forms and man­u­fac­tur­ing?

It will need a few years be­cause there are strin­gent CO2 ob­jec­tives in Europe in 2020 we have to meet, and we have a strong tech­nol­ogy and prod­uct plan for Opel that we are now im­ple­ment­ing. It’s go­ing to hap­pen with the end of each gen­er­a­tion of prod­ucts. It will be staged over three or four years. How do you es­tab­lish a brand in the U.S? The No. 1 pri­or­ity is to un­der­stand the U.S. con­sumer, which I know from my Nis­san days. But my peo­ple don’t. We need to get them up to speed to un­der­stand what is go­ing on and how peo­ple re­act here. That’s the goal of the first two phases with the mo­bil­ity ser­vice ap­proach (a car-shar­ing ser­vice us­ing com­pet­i­tive cars first, fol­lowed by PSA mod­els) to get more feed­back on fea­tures and per­for­mance, on what they like and dis­like. The third leg is de­cid­ing what tech­nol­ogy, prod­ucts, brand, and most ef­fi­cient dis­tri­bu­tion model to bring to the coun­try at that point in time. That’s an im­por­tant driver be­cause this is a 10-year plan. What U.S. cities will be first to of­fer cars us­ing the Free2­move car-shar­ing global app for phase one? There are sev­eral projects un­der prepa­ra­tion, but there should be a big East Coast city very soon. We’ll an­nounce it in a few months.

The No. 1 pri­or­ity is to un­der­stand the U.S. con­sumer, which I know from my Nis­san days. But my peo­ple don’t.”

On es­tab­lish­ing a brand in the U.S.

When will you start sell­ing your own prod­ucts in the U.S.? Will it be a lux­ury or mass-mar­ket brand? It’s not de­cided yet.

What do your brands of­fer the U.S. that isn’t al­ready here? We have a high level of mar­ket share in many other mar­kets in the world and the com­peti­tors are mostly the same, so why couldn’t we make U.S. con­sumers happy? Our en­gi­neer­ing teams are us­ing Rüs­selsheim en­gi­neers to make our next gen­er­a­tion of prod­ucts U.s.-com­pli­ant. That work started a few months ago (fall 2017) and is be­ing boosted by us­ing en­gi­neers who have been work­ing for GM for so many years.

You plan to elec­trify the whole lineup in 2025. Other au­tomak­ers have tar­geted 2019, 2020, and 2021. Why so late?

We start in 2019, and from there it ramps up. I think it’s 50 per­cent by 2020 or 2021, and then it ramps up to 100 per­cent. It com­bines pure EVS and [plug-in hy­brid EVS]. The plat­form is en­gi­neered to use the same assem­bly line to make petrol-pow­ered, diesel-pow­ered, Ev-pow­ered, and Phev-pow­ered cars.

How can you af­ford th­ese tech­nolo­gies given your scale? Our R&D and cap­i­tal ex­penses are around 8 per­cent. We are in­vest­ing heav­ily in elec­tri­fi­ca­tion and au­ton­o­mous ve­hi­cles. We are launch­ing the new DS 7 Cross­back, which is the first car of a sec­ond gen­er­a­tion of our pre­mium DS brand with Level 2 Au­to­mated Driv­ing sys­tems, and we are also in­vest­ing heav­ily in con­nec­tiv­ity and mo­bil­ity ser­vices.

What is your ramp up to au­ton­o­mous ve­hi­cles? Level 1 was on sale with the Peu­geot 3008 last year. Level 2 is the DS 7 Cross­back. Level 3 will be around 2020, 2021. And Level 4 around 2022, 2023. n

NOT THAT AU­TON­O­MOUS This DS 7 Cross­back with French Prime Min­is­ter Em­manuel Macron pop­ping out of the sun­roof has Level 2 au­ton­omy, so some­one is still in the driver’s seat.

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