With a market at half mast, after an exceptional year 2023the automotive sector sets up at Porte de Versailles in Paris (from October 15 to 20). In this gloomy context, manufacturers must meet numerous challenges: launching new models, coping with the establishment of foreign competitors in France, responding to the success electric vehicles which cannot be denied, especially within automobile fleets, inventing alternative transport with the undeniable multiplication of cars without a license for the private market or even adapting to the explosion of brands in favor of cycle work. Automotive professionals must adapt to new modes of mobility.
The start of the school year had a bitter taste for the dealers. The month of August recorded a decline in sales of 24% compared to last year. “The summer of 2023 was exceptional thanks to the catch-up of deliveries that could not be made in 2021 and 2022 following the shortage of semiconductors. The game of communicating vessels was in full swing,” explains Marie- Laure Nivot, director of automotive market analysis at AAA Data.
After the euphoria at the start of the year, due to orders placed before the ecological bonus was removed on certain models and the boosting of social leasing, registrations declined over the months to reach a decline of 0.5%. . “We remain in a disrupted period. Prices have continued to increase, particularly under the pressure of regulations requiring driving aid equipment for safety,” estimates Marie-Laure Nivot. Result: household purchases fell by 22%.
Waiting is in order
“The relationship with the car has changed. If it retains a notion of pleasure, it becomes above all utilitarian for transporting children or going to work. Above all, it has lost its statutory aspect”, notes Flavien Neuvy, economist and director of the Observatory Cetelem.
The market for corporate fleets also dried up, with a decline of 22.53% in August and 0.8% cumulatively. “Compared to the same period in 2019, the last year before the series of crises which affected the economy, the 2024 results are widening: the delay now reaches 62,077 business registrations”, notes the Arval Mobility Observatory .
Unsurprisingly, there was a wait-and-see approach. “A sluggish macroeconomic context, sluggish growth and a lack of visibility have fueled uncertainties,” summarizes Flavien Neuvy. “Decision-makers were disturbed by a finance law published late, on February 14, 2024. Financial conditions that were less good than before Covid led them to postpone their renewal. Finally, the area of political uncertainty slowed down the choices of investment which covers several years”, adds Lionel French Keogh, president of Hyundai France. Small consolation: an 8% increase in light utility vehicles over eight months.
The biggest disappointment comes from the electric. Its share stagnates at 10.87% in company fleets, compared to 29.75% for hybrids, 36.69% for diesel and 21.7% for gasoline. Households remain the main buyers, at 65%. However, this motorization stagnated at 13% of their purchases in the first half, while the general secretariat for ecological planning hoped that it would concern 1 in 5 sales. In question, the prices which remain 20 to 30% higher than those of thermal versions. “When we make you a promise, that of a car that is more expensive to purchase but more profitable in use, and the electricity bills skyrocket, the message comes out particularly muddled,” criticizes Flavien Neuvy.
In addition, charging infrastructures are not developing in large enough numbers, particularly in cities. The question arises when the driver lives in an apartment, without dedicated parking and does not have a nearby outlet. “The precursors had a garage or a place in front of their home to install a terminal. We must impose the equipment of condominiums and social housing. Half of Uber drivers live, for example, in HLM,” assures Flavien Neuvy.
A certain distrust of “wattage”
Finally, the French are still skeptical about autonomy and fall back on hybrids when they want a more virtuous model for the climate. “Customers are lost and no longer know which engine to choose,” acknowledges Richard Tougeron, general manager of Nissan France. The e-power solution accounts for 90% of our sales because it reassures. It equips our electric models without worrying about recharging because a gasoline engine acts as a generator for the batteries. It does not require connection and allows you to drive 1,000 kilometers without worry.
The persistent distrust of “wattage” has dampened the enthusiasm of manufacturers. Mercedes, Porsche, Audi, Volkswagen were the first to slow down, followed by Volvo which had made it its credo. “The French decision to introduce the eco-score to favor European production has affected manufacturers who manufacture their vehicles in China,” recalls Lionel French Keogh, reassured by the location of a Hyundai factory in the Czech Republic. The Dacia Spring, Volvo, Smart and Tesla thus lost up to 4,000 euros in bonuses.
European production of electric cars is below 40% to 45% of planned volumes. With repercussions on equipment manufacturers whose factories are also slowing down. Mega factory projects are on hold. The consortium between Stellantis, Mercedes and TotalEnergies has suspended its projects in Italy at Termoli and in Germany at Kaiserslautern. The Swedish Northvolt is also stalling in its expansion.
Delay the end of sales of thermal cars?
The Italian Minister of Industry, like the boss of Renault Luca de Meo and certain German manufacturers, are asking to bring forward the review clause set at 2026 by the European plan which puts an end to sales of thermal vehicles in 2035. They are also calling for a expansion to other technologies such as CO2 neutral fuels. “The work is underway at the oil groups,” assures Guillaume Maureau, deputy general director of commerce at Ayvens.
More urgently, “the Cafe (Corporate Average Fuel Economy) regulation will be strengthened in January 2025, lowering the CO2 emissions threshold for all vehicles sold by manufacturers to 81 grams per kilometer instead of 95. This development could prove problematic for manufacturers if demand does not follow,” warns Marie-Laure Nivot. As early as September, the European Manufacturers’ Association submitted a blank note to the European Commission to postpone this standard for two years. But differences between the automobile groups quickly arose, with Stellantis being the most virulent against any change in the rules.
“The transformation is underway,” says Philippe Robbrecht, CEO of JLR France. “I remain very optimistic about the evolution of technologies. We will launch six fully electric models between 2025 and 2030.” The group has repositioned its four brands (Jaguar, Defender, Discovery and Land Rover) in the super-luxury segment.
In the midst of rapid change, the automotive world is trying to accelerate its change and promises a wealth of new products to attract consumers. A hope without illusion.
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