The French automobile market faces a deep crisis

The French automobile market faces a deep crisis
The French automobile market faces a deep crisis

The French automobile market is going through a critical period, marked by a continued decline in sales and gloomy short-term prospects. Between the energy transition, the reduction in public aid and economic uncertainties, the industry is struggling to recover.

Auto sales in free fall

The French automobile market continues to fall into a difficult period. In November, only 133,318 new cars were registered, a decrease of 12.7% compared to the same month in 2023according to data from the Automotive Platform (PFA). This decline is part of an overall trend: over the first eleven months of the year, sales fell by 3.7% compared to the previous year, and by 23.4% compared to 2019, before the start of the crisis.

Despite this gloomy picture, certain engines are doing well. Hybrid cars recorded a notable increase of 17% in November, now representing almost one in two registrations. On the other hand, electric vehicles, although increasing in terms of market share (17% in November), show a worrying drop of 25% in sales compared to last year.

A new element complicates the picture: the decree on aid for the purchase of electric vehicles, which came into force this Monday, reduces the amount of bonuses. These now vary between 2,000 euros for the wealthiest households and 4,000 euros for the most modest. For Marc Mortureux, director of the PFA, this support is crucial: “ The existence of purchasing aid is an essential element in making a decision “, he said. He also insists on the importance of developing a second-hand market, made possible by supporting buyers of new vehicles.

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An industry under pressure

This review of aid comes as electric models, such as Renault's R5, are just starting to arrive on the market. Their cost, slightly lower than that of previous generations, could however offer a glimmer of hope in a context of slowdown.

The automotive sector, based on volumes, is particularly suffering from this prolonged crisis. Order books remain low, and economic uncertainties do not encourage households to invest in substantial purchases. “ It is quite unlikely that the market will recover in the short terme,” warns Marc Mortureux. This situation is pushing industry players to take drastic measures.

In , the equipment manufacturer Valeo announced the elimination of 868 positions, spread across eight sites. In Germany, Volkswagen is considering a 4 billion euro cost reduction plan, involving the closure of several factories. Unions are trying to limit the social impact of these decisions, but the outlook remains bleak for workers.

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