Barely envisaged, the already contested relocations deserve to be defended

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Barely envisaged, relocations already contested deserve to be defendedWhile we continue to import massively the vehicles we consume, whether electric or thermal, the movement to relocate assemblies, barely begun, is already being contested in the name of the obvious economic advantages of globalisation. Faced with this counter-offensive from the supporters of globalisation, we must stand firm and continue to try to make electrification an opportunity for the reindustrialisation of the French car industry.

In terms of jobs, added value, volumes produced and foreign trade, the French automobile industry has experienced a fairly rapid descent into hell over the last twenty years. This is mainly due to the gap that has been created between the vehicles that the French buy and those that the manufacturers believe can be profitably assembled in France: the market is dominated by the B segment, which the French manufacturers have decided not to assemble in France. read more

The depreciation of the euro threatens public support for the ecological transition and the car industry

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The car industry's dependence on politics and public funding is traditional. It is particularly pronounced in 2022 given the need to share the burden of the transition. More than its effects on the cost of imports and/or on the capacity of the European car industry to export, the evolution of the dollar/euro exchange rate, which has seen the European currency lose more than 15%, is important for its effects on the macroeconomic situation. Indeed, the forced march towards the electric vehicle, which is already difficult to digest for the European car industry, would be even more difficult if the relative generosity of the States observed up to now were to be called into question by the rise in interest rates and the consequences that would be drawn from this in terms of public finance.

In 2022, and for a few more years, the European automotive industry will be undergoing a transition imposed by climate change, which politicians have deemed not to have been taken into account quickly and vigorously enough by industry. In the face of this timidity and fears - well-founded - of exposing oneself to the duplicity of manufacturers, a very interventionist consensus emerged in Europe in 2015 and was strengthened step by step thereafter to lead to a ban on the registration of combustion vehicles - including hybrids - in 2035. read more

Electric vehicles: taking the Chinese route to avoid being left behind

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Volkswagen seems to be experiencing difficulties in China in order to avoid being ousted by the Chinese brands on the electric or electrified vehicle market. This difficulty, which is also that of Tesla in the face of BYD and the other major Chinese players, refers to the success of the industrial and technological policy of the Chinese authorities, which aimed to ensure that electrification would allow the sinicisation of the Chinese automobile. In China, as in Europe and the United States, this reality calls for reflection and policies that cannot be reduced to a headlong rush to move upmarket.

At the beginning of July, the press reported the appearance in China of the first true copy of the Citroën Ami, priced at 2,500 euros.

The same week, commenting on the figures for global sales of electric or electrified vehicles (the famous NEVs for New Energy Vehicles) in the first half of 2022, commentators stressed that Tesla was losing its global leadership to BYD. For example, Forbes reported, "BYD delivered 641,350 EVs and plug-in hybrids to customers in the first half of the year, up 315 percent from a year earlier, compared with Tesla's 564,743, up 46 percent." read more

Automotive industry: can we sustainably reconcile volume indifference, high prices and maximum pricing power?

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It is hard to say who is right in the debate that has emerged over the last few months: faced with a situation where collapsing volumes coexist for manufacturers with very high profits, some see the effect of a combination of extraordinary factors that the future will not be able to bring together again; others are convinced that everything has been and is being done by the management of the major automobile groups so that, well beyond the Covid crisis and that of the semiconductors, these are structural constants. This debate is crucial for the whole industry. It is also at the heart of distribution issues and debates concerning the relevance or not of the agency contract as an alternative to the currently dominant scheme. read more

Is Europe's energy and car industry so determined to reduce carbon emissions

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As German coal-fired power stations restart, the European Parliament is examining in committee and then in plenary the famous "taxonomy" which designates what, in terms of electricity production, can be considered green and what cannot be supported as such. For the automotive industry, which needs more and more electricity not only to run vehicles but also to produce batteries, this debate is crucial. France, which is already struggling to defend its "low carbon" competitive advantage, must be able to preserve it. Strangely enough, this will only be possible politically if we accept that French nuclear power is treated unfairly like German gas.

Our German neighbours, who until recently were not far from giving us lessons in ecology and energy policy by extolling the merits of their EnergieWende, have, through the voice of their minister, Robert Habeck, an ecologist who joined the government last December to decarbonise the German economy, announced that they were going to extend the life of coal-fired power stations.  read more

Should we desert the ACEA to make ourselves heard? Carlos Tavares' highly political gamble

The persistent turbulence involved in negotiating the major change in the automotive industry makes collective action at branch level even more difficult than usual. It is therefore tempting for manufacturers disappointed by the successive defeats of their lobby in the face of politics and environmental NGOs to play solo and, instructed by the Volkswagen precedent, Carlos Tavares made this choice this week. Simply, where Volkswagen had played it safe, Stellantis is much more explicit and takes the risk of posing, rather awkwardly no doubt, as a direct competitor of politics. read more

After the vote in the European Parliament, it is time to ask the real questions

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As the past week has shown, the debate on the electric vehicle is more a religious war than a real political battle over the automotive industry and services we want to develop and the vehicles we want consumers to use. Since the strategy pursued by the politicians and the Commission is to put the industry against the wall and force it to keep a bet they have made for it, the time has come to ask the operational questions, which are no less political: how do we want to fulfil these specifications and/or how can we keep this bet in our best interests? read more

The difficulty of designing a low-cost car refers to the depth of the gap to be bridged

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The electric vehicle at 100 euros per month could well remain an electoral formula that will only become effective for a few nurses practising in the rural or peri-urban world. Private offers such as those from Cetelem presented this week seek to compensate for the inadequacies of public schemes and are undeniably a step in the right direction. The fact remains that the rents offered are very dependent on public aid and that, even under these conditions, they struggle to be competitive with the cobbled-together solutions that households have been devising and implementing for years. There is still a long way to go to find an operational solution to the question that, intellectually, we are now able to ask correctly. read more

Negotiate the prohibition of the combustion engine vehicle against a real consideration of the two social issues

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It is almost certain, at the end of May 2022, that the proposals to ban the registration of new combustion vehicles in 2035 will be adopted. German and other opponents are throwing in the towel and the PFA's usual objections appear to be a futile last stand. In a context where most of the 27 Member States are not very concerned and where, since the VW affair, the voice of industry has become barely audible, these statements are unlikely to be heard. Although not all the arguments put forward are equally acceptable, the issues of the ability of households to purchase electric vehicles and the ability of employees to keep their jobs are unavoidable and NGOs and governments would do well to take them into account. read more

The new exemption regulation: the quality compromise of maturity

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The regulatory debate remains crucial in the field of motor vehicle distribution, but it is now more dispassionate than it used to be. This clarifies the terms of the dialogue and/or consultation and everything indicates that the four years that have just elapsed between the beginning of the renegotiation process of the exemption and today have been useful and have made it possible to produce a balanced text in which the distributors, by accepting a form of technicalisation of the debates, have managed to be heard on the essential points.

The time is long gone when the entire downstream sector was convinced at each renegotiation of the regulation that its life was at stake. It corresponded - between 1995 and 2002 in particular - to a period when, observing what had happened to white and brown goods in household appliances, seeing the development of the "superstores" of AutoNation and others in the United States and witnessing the emergence of e-commerce, people were afraid and imagined revolutionary scenarios. read more

A year of demotorisation in the Ile-de-France region does not tell us much about the future of the automobile in France

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The publication of a fairly serious study on the vehicles still registered on 1st January of each year for the years 2012 to 2020 by the Apur concluded that the number of vehicles in the Greater Paris Metropolis has fallen over the last three years and that the number of vehicles in the Ile-de-France region will fall by 2020. This has led to comments that over-interpret this result to a large extent and tend to surf on the idea that Paris is less and less an exception and that what has been happening there for many years now will also happen elsewhere. The very content of the study tends, we claim, to show that the opposite is true.

It is with great pride that the Apur (1) officials have communicated the results of a study that the agency has devoted to the evolution of car fleets in the Greater Paris metropolis (MGP) and the Ile-de-France. Indeed, the study, which examines vehicles registered on 1 January of each year over the period 2012-2021, shows that, over the last few years, the decline in the number of vehicles no longer concerns only Paris but also the Greater Paris region (131 municipalities) and even, for 2020, the last year studied, the entire Ile-de-France.  read more

What will the manufacturers' managers in the car distribution groups do?

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Beyond the anecdote, the chronicle of transfers kept by the professional press indicates a fairly obvious increase in the movement of managers who have spent 20 or 30 years working for manufacturers and are being seduced by the offers made to them by distribution groups. One can read this cynically and say that they are finding a way to work less to earn more. Above all, we must understand that these professionals know how important it is to innovate in terms of distribution and automobile service and have acquired the conviction that the innovations they believe to be necessary or useful will be easier to implement in a distribution group than with the manufacturers. read more

Can manufacturers carry the stock?

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The debate on agent contracts within the professions involved in the car distribution business is progressing. It still needs to be clarified because, in 2022, it is difficult to decide on the reliability of the "new model" if we take as a reference very atypical years when, between Covid and the semi-conductor crisis, no usual reference is valid any more. Nevertheless, by focusing on the key issue of vehicle stocks and their financing, the terms of the debate begin to become clearer.

The regulatory issue is not yet settled and the objection raised by Cecra around "non genuine" agency contracts is testament to this. Nevertheless, as the threat becomes clearer at Stellantis, VW (Cupra) and others, the fundamental questions are beginning to emerge, and they are primarily economic.

They consist in asking whether and under what conditions manufacturers could give up the dealership model and the advantages it has for them and/or whether their current reforming ardour is mainly explained by the unusual combination of factors to which the business is subjected. read more

Between dogma and expertise: how to deal collectively with today's major issues?

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The Russian-Ukrainian issue, the fiasco of German energy policy that it reveals and the "gas diplomacy" that has been linked to it raise very difficult questions that the automotive world cannot escape. These questions relate to the energy policies of the various European states. Although highly technical in appearance, these questions are also eminently political and it would be illusory to think that they can be solved by an increase in expertise: on the contrary, it is by providing the means to have a real public debate on these matters that solutions can be found.

For the automotive industry, beyond the immediate problems faced by manufacturers, in Russia itself or because of dependence on Ukrainian suppliers, the current crisis is above all a very strong incentive (or even an obligation) to integrate the energy issue into their agenda better than they have done up to now. read more

Renault in Russia: avoiding the worst

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One could summarise Renault's problem with the war in Ukraine today by a formula of the type "impossible to do nothing and difficult not to be accused of doing too little". In fact, given the extent of the exactions perpetrated by a Putin who has been pampered by Renault (as by most French politicians and businessmen) up to now, it seems very complicated to do nothing and wait for a return to better political fortune. However, we should not allow ourselves to be lectured by actors who have nothing to lose in this story and could even have a lot to gain. Without rushing into anything, the politicians and the board of directors of Renault would gain by looking for a narrow path which would allow them to avoid sacrificing assets of crucial - even vital - importance for Renault. read more

Can the electric vehicle and the debate about it finally mature?

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For the past ten years, the professions concerned have had the same debates and the same demands concerning the electric vehicle (BEV): those who call for respect for the laws of the market and technological neutrality repeatedly ask that the public authorities assume the bulk of the burden of adjustment, on the pretext that they have imposed the choice of decarbonisation. The "whatever it takes" of the last two years has reinforced this tendency and the grand coalition formed around ACEA on this issue is calling for even greater and more costly support measures. Perhaps it is time to be a little more careful with money.

To put pressure on the public authorities, ACEA has sought out not only the upstream automotive sector with Clepa but also the electrical industry (Eurelectric), energy producers (Wind Europe) and charging infrastructure producers (ChargeUp Europe). read more

Distributing its vehicles and developing its services to customers with or without its network: the two schools

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With the renegotiation of regulations and contracts, the question of how to manage its distribution, reduce costs and share work and value with the networks is, in 2022, posed with great acuity. While some believe it is time to 'disrupt' the historical model and put the traditional players at a distance, the majority of manufacturers do not think it is possible or appropriate to do without. The terms of this debate continue to remain rather nebulous as to the numbers. The underlying philosophies, however, are becoming increasingly explicit.

Twenty-five years ago, at the end of the 1990s, the world of American car distribution was in full swing due to the emergence of a few very large distribution groups such as AutoNation, Car Max and Driver's Mart.

Coming from other sectors of activity, these "new comers" promoted the concept of "superstores" and claimed to "disrupt" the dusty world of car distribution and its indecisive dealers. At the time, they were referring to - but never giving sources for - surveys of American households that would have indicated that the experience of buying and repairing a car was, in terms of "customer experience", just below that of visiting the dentist... read more

Are emerging countries still a concern for our manufacturers?

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For several years, the chapter 'ensuring its presence in emerging markets' has almost disappeared from the strategic agenda of carmakers and, in particular, French carmakers. At a time when Putin is starting a war with Ukraine and breaking up the emergence of one of the BRIC markets, Stellantis and Renault seem to want to reopen this chapter since, when presenting his 'Dare Forward 2030' plan, C. Tavares announced a target of 25% of Stellantis' turnover in these countries by 2030 and L. De Meo is preparing to present a similar plan for Renault.

At a time when Russia's war against the Ukraine is reminding manufacturers that the 'Global Value Chains' optimised by their purchasing departments are very fragile and that the famous BRICs, about which there was so much talk 10 years ago, are uncertain eldorados, we can ask ourselves how this question of emerging countries and, more generally, of the capacity of European manufacturers to be present outside of Europe, will look in 2022. read more

Stellantis' good results: a matter of value capture as well as management

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In presentations of results and improved margins, manufacturers have been showing us for years how much they are gaining on the "purchasing" item. Stellantis had announced that the synergies would concern this item in the first place and confirmed this. This means that the gains made on the one hand correspond to the efforts required of the partners. This is another way of looking at the very good results of Stellantis: what will be given to employees and shareholders corresponds to major efforts by the State, suppliers and - this is a point that is insufficiently emphasised - distributors.

The results of Stellantis obtained by producing pro forma accounts for 2020 - i.e. equivalent to what they would have been if PSA and FCA had been married last year - are very impressive: they correspond to an operating margin which goes from 6.9% of turnover to 11.9% and increases by almost 9 billion euros (from 9.2 to 18). Bertrand Rakoto had already pointed out on Friday that the bulk of these results were associated with North America, which alone contributed 5.2 billion euros out of 8.8, i.e. 60% of the additional margin, since the operating margin rose from 6.1 billion (10.1%) to 11.35 (16.3%) (see detailed presentation). read more

How much of Renault's good results can be explained by the fact that the state pays for short-time work?

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In two years, Renault has seen its world production fall by 28% and its turnover by 17%. While its workforce has fallen by less than 10%, the group has become profitable again in 2021. In the face of this arithmetic, one may wonder about the role played by short-time working. We are entitled to know more and to obtain from Renault and the other beneficiaries a more precise figure of the uses made of public money.

As expected after the presentation of the very encouraging half-year results, the presentation of the 2021 results confirmed the trend: the recovery promised by the plans initiated before the arrival of Luca de Meo and confirmed by him was assured earlier than expected. Despite volumes still falling, the evolution of turnover and - above all - of results is in the green.

Thus, between 2019 and 2021, the number of cars (PC+LCV) sold by Renault worldwide fell from 3.75 million units to 2.7 (-28%). In Europe, the drop is 520,000 units (from 1.95 million to 1.43, i.e. -27%). In terms of turnover, the drop is less severe, since from 55.5 billion in 2019, it has fallen to 46.2 billion in 2021 (-16.7%). Above all, turnover, which had fallen by 21.7% in 2020, is recovering very significantly (+6.3%) despite the fall in volumes. read more

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