November saw a notable decline in the French automotive market, with new passenger car registrations dropping 12.7% year-on-year. Sales decreased by 3.7% for the year and 23.4% compared to 2019, causing challenges for suppliers. Job cuts were announced by Valeo, reflecting broader industry struggles. Electric vehicle sales fell 25%, despite a slight market share increase. Government incentives for electric vehicle purchases are set to be reduced based on income, impacting consumer decisions. Hybrids, however, showed growth.
Weak Performance of the French Automotive Market in November
The French automotive sector displayed significant weakness in November, as indicated by manufacturer reports released on Sunday. This decline is evident for both traditional combustion engine vehicles and electric models, which are set to receive substantially reduced state support starting in 2025.
In November, there were 133,318 new passenger car registrations, marking a 12.7% decrease compared to the same month in 2023, which had the advantage of two additional working days. The Automotive Platform (PFA), comprising various French manufacturers and suppliers, provided these figures.
Sales Trends and Market Challenges
Throughout the first eleven months of the year, automotive sales dipped by 3.7% relative to the previous year. More alarmingly, there has been a staggering 23.4% drop compared to the same timeframe in 2019, prior to the crisis. Marc Mortureux, PFA’s director, highlighted the severe challenges this presents, particularly for automotive suppliers who depend on high sales volumes.
The situation has prompted numerous social plans, not only in France but also in Germany. Recently, automotive supplier Valeo announced plans to eliminate 868 jobs across eight sites in France. Mr. Mortureux expressed skepticism about a quick market recovery, noting that current order book levels remain discouragingly low.
Political uncertainties and rising unemployment fears are contributing to consumer hesitance, making them reluctant to invest in big purchases. Although electric vehicles are increasing their market share—recording 17% in November compared to 15% the previous month—overall sales for these vehicles have still fallen by 25% year-on-year, with only 23,255 units sold.
Recent government measures, including a new decree published in the Official Journal, confirm a sharp cut in bonuses available for new electric vehicle purchases. These incentives will now depend on a household’s tax bracket, offering between 2,000 and 4,000 euros for the wealthiest and least wealthy households, respectively.
While there is a growing inclination towards electric vehicles, Mr. Mortureux emphasized that the availability of purchase incentives is crucial for consumer decision-making. He also pointed out that the future success of electric vehicles hinges on fostering a robust used vehicle market, which can be stimulated by supporting new vehicle buyers.
One potential silver lining is the upcoming launch of several new models from French manufacturers, such as the electric Renault R5, which is anticipated to be more affordable than earlier generations and is expected to start making its appearance in the sales figures.
Among various vehicle types, hybrids are the only segment experiencing growth, with a 17% increase in November, now accounting for nearly half of all registrations, compared to one-third in November 2023. In the broader market, Stellantis reported a 13.15% decline in sales, while Renault’s sales remained relatively stable at +0.32%. The Peugeot 208 continues to be the top-selling model for individual buyers in the first eleven months of the year, followed closely by the Renault Clio and Dacia Sandero.