Most of us own a car and drive it daily. Peugeot is re-entering the U.S. market to broaden our idea of “mobility” and change the relationship we have to our car companies.
Peugeot pulled out of the U.S. market in 1991, before many—if not most—Millennials were born. Yet this will be a key demographic for the French car-maker to target when it makes its return to North America. As president and CEO of North America, Larry Dominique is leading that effort.
Peugeot isn’t coming back with a huge network of dealers and a full line of cars. It’s coming back as a “mobility partner” starting with an app called Free2Move that lets users access multiple ride-sharing, car-sharing and even bike-sharing providers in one place. It’s live in 10 countries, up and running in Seattle and expanding deeper into the U.S. this year. Actual car sales will follow. But as ownership models shift, Peugeot is in an unusual position for a legacy car manufacturer. When Dominique thinks What the Future, he’s wondering what it will take to get people to give up owning a car.
GenPop: Your question was about how different mobility solutions could replace car ownership. How will that answer shape the future?
Larry Dominique: In the United States about 17 percent of vehicles are sold into fleets – leasing, rental cars, commercial fleets and ride-sharing. The other 83 percent are still sold or leased to people. In 2030 or 2040, most vehicles will still be sold, leased or subscribed to private owners, but the percentage of those vehicles that are going to be in fleets will increase.
GenPop: We see in the data that people currently have a hard time imagining giving up a vehicle because that future seems so abstract and far off. Those who can imagine this scenario imagine public transportation or another car-free mode of transportation like walking or biking taking the place of a car they own.
Dominique: We’re trying to understand how urban dwellers are evolving relative to ownership. When we start actually selling cars, we want to have a diverse business model to satisfy customer mobility – whether they need a car for a minute, an hour, a day, a week, a month or multiple years. The reality, and you saw it through the survey, is that we will never be a mass transit country. Geographically, we’re just too big. There must be alternative modes of mobility for people beyond public transit.
GenPop: In the data, younger respondents are more receptive to alternatives. That’s probably partially because younger people are generally more receptive to new technologies, but also perhaps due to their evolving relationship
with transportation and mobility.
Dominique: They think of their lives differently than we [Baby Boomers] do. For us, it was about owning the house, owning a car, owning assets. For them it’s about “I have a monthly car payment. I have a monthly phone payment. I have a monthly lease payment.” For them it’s a very different lifestyle.
GenPop: Is there an educational component to how you need to market and grow these services?
Dominique: Yes, especially in urban areas. There’s a mindset of “If I spend $400 a month to own a car plus another $120 a month for insurance, plus gasoline, plus everything else,” all of a sudden people start to realize — and we can educate them — that they’re spending $800 a month for a vehicle that sits still 90 percent of the time. It needs to be put in a lifestyle or life experience context.
GenPop: Millennials’ changing idea of ownership in general and for cars in particular seems like a major factor as we look toward shared and autonomous transportation.
Dominique: It’s hard for my French friends to understand that Americans buy more than they need. You hear it from consumers all the time: “Well, I got that three-row SUV even though I have one kid because I might have to take my neighbor’s kid with me.” Or “I bought this pickup truck even though I live in a suburban neighborhood because I might want to tow something one day.” Americans are unique that way.
GenPop: For older Americans, the data shows that they’re currently less interested in giving up a car. But once they can visualize how it will allow them to lead the active life they’re used to, potentially for a longer period of time, you’d think that would become a fairly easy sell.
Dominique: I think it’s going to be a huge opportunity. We have to be careful about their income because most Americans end up on a very flat income when they get older. But at the end of the day I can see a huge unserved market. I live in Southern California, and there are lots of senior citizens, and I see the Sprinter vans from the assisted living facilities taking people to doctor appointments and the mall and the park.
GenPop: In some ways, these older Americans are already using a shared-services model. But being able to individualize through autonomous vehicles would yield even more freedom and flexibility.
Dominique: Exactly. Baby Boomers are not quite as digitally savvy as are social media-oriented Millennials. So how do you educate Boomers? How do you inform them of these new services? It’s going to be a very different type of marketing and communication than in the digital world of the Millennials and the iGens.
GenPop: Intergenerational health care is a big issue. Uber and Lyft have announced services for health providers to schedule pick-ups to get patients to their appointments. But if an adult child could schedule an autonomous or shared car to make sure their parents get there safely, that would be great too.
Dominique: Or a GenXer or Millennial or iGen can send the service to go get Grandma to come visit if they don’t have the time to pick her up.
GenPop: And when Grandma is there, you could have an accessible minivan.
Dominique: Or it could be that the way we look at mobility is that you have a relationship with our brand. Say I sell you a Peugeot 308. It’s a four-door hatchback; it’s not a car that’s going to be easy for Grandma to get in and out of. If you need an SUV for the week because Grandma is in town, maybe we can make that happen as your mobility partner.
If you buy one of our cars we’ll give you access to mobility.