The automotive market is suffering from Covid-19 ... and it should continue

The Renault Zoé is one of the successes of the French manufacturer.

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• Canceled due to the pandemic linked to the coronavirus, the “Paris Motion Festival”, ex-Mondial de l'Auto, should have opened its doors to the public this Thursday in Paris.

• Like this event, the entire automotive sector suffers.

  The French Manufacturers' Committee, which publishes its monthly figures on Thursday, estimates the drop in registrations between 25 and 30% over the year compared to 2019. For the month of September alone, French manufacturers are experiencing a decline of 5% per year. compared to the same period last year.

• The losses in the sector and the pessimistic forecasts for the coming months have consequences on employment, as at Renault, which plans to cut 15,000 jobs worldwide, including 4,600 in France.

  Or Valeo, an automotive supplier which is currently negotiating a freeze on the salaries of its employees.

Unmissable event for car fans, the Paris Motor Show should have opened its doors to the general public this Thursday in Paris.

If the “Paris Motion Festival” was canceled due to the coronavirus pandemic, the automotive market is also suffering.

While the Committee of French Automobile Manufacturers (CCFA) has just published the registration figures for the month of September - revealing in particular that French manufacturers have recovered less well (-5%) than their foreign competitors (+0 , 02%) in this fall -, François Roudier, director of communication, deciphers for 

the market situation and the trends to come.

If registrations started to rise again when they left confinement, according to CCFA figures, they have been falling since.

Was the trend confirmed in September 2020?

Yes and no.

If light vehicle registrations are on the rise again very slightly compared to September 2019 (+ 0.42%), this is partly due to commercial vehicle registrations.

Passenger vehicles are still down compared to the same period last year (-2.97%).

The number of registrations in this category is higher than that recorded this summer but these are figures to be taken with a grain of salt, because registrations are not sales.

Vehicles were sold during containment and after, thanks in particular to the conversion bonus, and some could not be delivered immediately, and are therefore only registered now.

Can this end of the year compensate for the difficult first months of the crisis?

We have not made up for the two months of confinement and we will not make up for them.

For the moment, we remain at -29% compared to the first 9 months of 2019 and our forecasts remain on a decrease of between 25 and 30% over the year.

We are currently counting on an estimate of 1.6 million passenger vehicles registered in 2020, which is the lowest market for ten years.

Fortunately, the light commercial vehicle market is doing better thanks, in particular, to the purchases of large customers in the construction industry, and this is a good indicator of the economy.

In this period of crisis, are consumers moving more towards vehicles with less environmental impact?

Towards less diesel?

For now yes !

The progress of pure electric and plug-in hybrid is considerable, more than 10% overall, we see it with Toyota and its Yaris, for example.

There has really been a change, linked to the bonus launched during the crisis and which has been extremely positive.

But it does not yet replace diesel, since it stabilizes around 30% of registrations, after having fallen for a long time.

Hybrid and electric vehicles are instead taking market share from gasoline.

This is mainly because there is no real alternative to diesel for heavy riders.

We are working on new batteries with more autonomy but, for the moment, we are blocked by that.

Could electric and hybrid vehicles "save" the year 2021?

At the moment, our vision for next year is very vague.

The latent economic crisis and the lack of household confidence cloud our estimates.

But manufacturers are worried about the reduction in the ecological bonus and the increase in the malus to come.

The last to want to take advantage of it could rush on and embellish the end of the year.

But that will have very negative effects on the market in 2021, as will the possible “Evin Climat Law” [which provides for regulating the possibility of advertising according to the ecological impact of the product].

Hybrid and electric products would also be affected because, if we no longer have the advertising tool to drive sales, it will be difficult to encourage purchase.

It's damaging when you see the success of a model like the Renault Zoé.

How are the French manufacturers doing?

During the month of September, registrations from French groups fell by 5% ...

In France, the Renault and PSA groups share 58% of registrations.

This is considerable, especially since this figure was only 52% in recent years.

These are the few manufacturers, with Volkswagen, to have rather positive results.

Products like Dacia Sandero or Peugeot's 3008 have found their customers.

For foreign manufacturers, it is more difficult.

Only Audi is making a large number of registrations this month, but this is mostly due to delivery delays.

French groups share more than half of the hexagonal cake.

However, employment in the sector is suffering a lot, recently Renault announced the elimination of 4,600 jobs in France, Valeo has also cut jobs and frozen the salaries of its employees ... Could the situation improve?

We are in a terrible crisis which affects France, but also Germany, and equipment manufacturers sell a lot to manufacturers across the Rhine.

We are in a period of restructuring in our industry, and it started before the Covid-19 crisis.

PSA had already started its restructuring and is now starting to take on temporary workers.

Renault was also launched, but the situation on the European market, which is important for our manufacturers, is difficult.

We are seeing more and more plant closures at small suppliers.

There are also closures of small companies that have technologies that are no longer useful, such as those working on diesel.

And that's not to mention Brexit ...

What are the consequences of the United Kingdom's exit from the European Union on the French automotive sector?

This will have terrible effects on the British industry and it will have repercussions on French manufacturers, in particular with regard to equipment.

The Opel brand (Groupe PSA) and its sister company [Vauxhall] also manufacture there.

In the absence of a customs agreement on imports and exports to the United Kingdom, the price of vehicles there will be completely changed.

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