Double-Digit September Sales Drops the Norm in France
Executive Summary
The industry has revised its full-year forecast to a 10% drop in car deliveries, which were off 13.9% through September. The expectation implies a sales uptick of 1.8% in the final quarter, a difficult assumption in the current climate.
PARIS – The continuing struggles of France’s automotive industry are not overshadowed by the Sept. 29 opening of the biennial Paris auto show.
Sales of cars and light-commercial vehicles in the country dropped 17.3% in September, lowering year-to-date deliveries 12.9%.
Double-digit declines were the norm, and national auto makers Renault and PSA Peugeot Citroen were no exception. PSA was off 17.3% on the year, and Renault off 16.5%.
Renault Chief Operating Officer Carlos Taveras last week said closing a factory is possible, and CEO Carlos Ghosn said unless things in France change, the auto maker won’t exist as it does today. PSA has government permission to close its small car plant in Aulnay at a cost of 3,500 jobs, but unions continue to battle the auto maker.
The CCFA industry association lowered its expectation for the year to a 10% drop in car deliveries, which were down 13.9% through September. The expectation implies a sales uptick of 1.8% in the final quarter, a difficult assumption in the current climate.
Volkswagen deliveries fell 17.4% last month, leaving the German auto maker down 4.5% on the year. Ford tumbled 29.4%, GM skidded 19.4% and Fiat slumped 27.9%. Toyota and Hyundai-Kia were the only groups showing sales increases, up 5.5% and 24.2%, respectively, although individual brands Audi and BMW also were positive.
September’s losses occurred in the face of heavy discounts by nearly all auto makers.
Suppliers saw first-half volumes decline 11%, according to the FIEV, the French suppliers’ association, and President Claude Cham predicts that the figure will hold for the year.
Former Michelin executive Michel Rollier, who heads a state-supported group that coordinates relations among OEMs, suppliers and other industry stakeholders, says the supply chain is in better shape now than it was in 2008, when the economic crisis began.
He says the government, the industry and buyers want to see consolidation so that the remaining suppliers are “powerful, international, diversified and have a critical good size.”
French President Francois Hollande, visiting the auto show on the second press day, promises the government will design a 5-year plan to support the auto industry’s competitiveness. He says labor costs are not the auto industry’s sole problem.
“It’s not one time, it is not one event, it is not one new rule, it is not one circumstance that the auto makers and the whole industry is asking for,” Hollande says. “It is at the same time a vision, a stability, the rules that we put in place and an engagement of the country for five years – that is what we are going to do through the plan for competitiveness.”
