French automotive foreign trade 2021: the decline continues


The figures of the French automobile foreign trade show once again how much it is necessary to relocate rather than registering a movement in this direction. The figures have been scrutinised and reprocessed, but for the moment they do not show that the laudable intentions expressed by the Elysée or Bercy that electrification is an opportunity for the reindustrialisation of France are beginning to manifest themselves. The opposite is true and the figures even seem to indicate that electrification is dragging down the French automobile foreign trade on both the equipment manufacturer and the manufacturer's side.

The rather catastrophic results of French foreign trade are partly linked to the automobile. On the vehicle side, the very large deficit has widened even further. On the equipment industry side, the improvement of the year 2020 is already behind us since producing in France now implies imports of such importance that the supply of factories outside France by French equipment manufacturers is no longer sufficient to compensate.
We propose here three commented tables constructed by us on the basis of customs statistics freely available on the Ministry's website which we have reprocessed. read more

Gigafactory Verkor in Dunkirk: Renault takes the lead in the race for electric patriotism


PSA has long prided itself on having been less of a relocator than Renault and has, at times, used this as an argument to get the state to arbitrate in the direction that best served the company's interests. For the moment, by adding a French gigafactory to the Chinese one, backed up by the manufacture of the first European mass-produced battery electric vehicle in France, Renault is in the lead.

Renault-Nissan had initiated a movement at the end of 2020 that seemed to give substance to the proposals of President Macron who, on 26 May, declared at the Valeo factory in Etables that the objective of one million clean cars "made in France" should be aimed for by 2025.

By implying from his arrival in September that he wanted an affordable electric vehicle to be assembled in France, Luca de Meo had sent a powerful signal: while the increasing purchases of battery electric vehicles and imported rechargeable hybrids competing with the Zoé and the Peugeot or DS seemed to contradict the ambitions of May 2020 in the French foreign trade statistics, the announcements concerning the Mégane E-Tech and then the R5 and Micra came month after month to reinforce the credibility of the French ambitions.  read more

Together we are strong! Towards a Coordinated Action for the Social-Ecological Trasformation of the European Automotive Industry


Starting in the late 1970s, we witnessed the spread of neoliberalism, building on market liberalisation and privatisation. The dismantling of tariff and non-tariff barriers to international trade and the opening of countries to foreign investment, technological progress in the fields of information and communications technology (ICT), and decreasing costs of coordination and transport completely changed the organisation of production. As a consequence, large companies in the Global North could outsource and offshore a significant share of their economic activities. So-called global value chains (GVCs)1 emerged, multiplying the trade of intermediates and semi-finished goods across borders (Barrientos et al. 2016: 1214). In fact, this geographic dispersion of globally integrated production steps represents the distinctive feature of the latest wave of globalisation in comparison to earlier waves, which displayed – from a trade perspective – an increased exchange of finished goods on the world scale. The deepened trade integration through cross-border production chains has also changed the power relations among companies and between capital and workers. On the one hand, we witnessed what Bennett Harrison (1994) termed “concentration without centralisation”. read more

A pacified and rebalanced Alliance


At the end of January, it was difficult to make the link between the serene presentation of the Alliance's strategy for 2030 and the troubles in which it found itself just over two years ago. The presentation of the financial results to come will tell us what role the return to better fortune plays in this matter but, at this stage, we can only note that the work of pacification led by Jean-Dominique Senard seems to have borne fruit. It refers to the imposition of the 'leader-follower' principle which is as much a way of admitting that one does not know how to cooperate as an attempt to do so anyway.

Since the arrival of Luca de Meo (LdM) at the helm of Renault, we had almost forgotten that an "Alliance" with Nissan and Mitsubishi existed. However, with the arrest of Carlos Ghosn and in the months or years that preceded it, the procrastination of the Alliance and the states of mind of some and others concerning the distribution of work, powers and shares within it constituted the main news of the companies. read more

Technological neutrality and political choices: what place do we want for hydrogen?


While politicians are often accused of overstepping their legitimate right to guide our choices in the energy transition, it can be argued that it is urgent that we make democratic choices. To guide these choices, IDDRI has produced a study on hydrogen which shows precisely that we are not suffering from hyper-politicisation of these issues but from under-politicisation: there are decisions to be made in France and in Europe in these matters and there is no reason why they should be made outside any democratic process.

With the 'whatever it takes' and quantitative easing, one could have the feeling that everything was simultaneously possible. Thus, in the face of the 'climate emergency', anything that could be seen as likely, in the more or less long term, to ensure the emergence of 'carbon neutral' solutions deserved to be financed and promoted. Moreover, in a context of very strong uncertainties about activity, demand and technological avenues, governments, eager to revive activity, have often seemed, over the past two years, to be chasing after projects to be financed rather than being overwhelmed by their abundance. read more

Personal mobility survey: the growing need for mobility is more important than the modal share of the car


The very heavy national survey on the evolution of French mobility behaviour that our country is only able to afford every 10 years has just been published. The clarifications it provides are based on figures and scientific arguments. However, between the climate emergency and the yellow waistcoats, they do not exhaust the debate, which ultimately remains fundamentally political.

Mathieu Chassignet, mobility and air quality engineer at Ademe, has a very relevant blog on mobility issues hosted by Alternatives Economiques. He brought to our attention the fact that the Ministry of Ecological Transition had just published the complete results of the 2019 "Mobility Survey of People". 
This is the very cumbersome and expensive national survey carried out about every 10 years and which measures the mobility of the French and compares it over time. The last edition was published in 2008 and, even though other sources are available to understand how these behaviours are evolving, the world of specialists in these questions was eagerly awaiting this publication and had had to make do with very partial elements until now.  read more

The big moves in leasing and long-term rental pose as many problems as they solve


After the reorganisations carried out by Stellantis following the merger in the organisation of the leasing and financing activities concerning its 14 brands in the different countries, it is the acquisition of LeasePlan by ALD that made the headlines at the beginning of 2022. Beyond the desire of all the major operators to sit at the very attractive car leasing table, the question of how to manage this dossier and what real advantages size represents in this respect remains. read more

Plug-in hybrid vehicles: problematic support also from the point of view of French industrial interests


The attacks on the plug-in hybrid vehicle by NGOs are, with fairly strong arguments, mainly for reasons of environmental policy. The issue also deserves, in France in particular, an examination in industrial and strategic terms. From this point of view, despite the success of Stellantis and its four plug-in hybrid models assembled in France, it is not appropriate to continue with a plug-in hybrid policy that mainly boosts German and Swedish sales.

In Europe, public policies to reduce emissions are mainly restrictive or incentive policies and marginally industrial or R&D policies. However, as the France Stratégie report of May 2018 on Public policies in favour of very low emission vehicles underlined, it is the countries that have real industrial and strategic projects for electric or electrified vehicles that are leading the way. 

From this point of view, the report already underlined: 
i) the opposition between China and the United States is emblematic in that it puts the nation without an industrial policy in a very defensive position compared to the one that does have one;
ii) the EU mainly emphasises the need to reduce greenhouse gas emissions and, within the EU, at the time, only the United Kingdom seemed to have an industrial project involving strengthening the supply chain and supporting R&D and training. read more

Is France a winner in electric cars?


While, since 14 July, there has been a feeling that the chances of Brussels confirming the objective of putting an end to the marketing of vehicles powered by combustion engines or hybrids as early as 2035 were high, the year 2021 is ending with increased doubt. Indeed, as this scenario becomes clearer, everyone tries to project themselves into the next eight to fifteen years and the prospects examined turn out to be rather unenthusiastic and give arguments to all those who wish to counterbalance the 'climate emergency' with a 'social emergency'. read more

Bringing down the price of new cars must become a European priority, despite Euro NCap


 The growing concern about new car prices and the ability of the European car industry to still appeal to households is well founded. This week it has come up against the contrary objectives of Euro NCap. This should be an opportunity to review a number of trade-offs that have prevailed for more than 20 years in this industry and which it seems urgent to revise.

The news at the beginning of December saw the Euro NCap offensive against Renault, which Florence Lagarde analysed for us on Thursday, intersect with the publication of figures for new vehicle registrations by households, which the Cetelem automobile observatory underlined as being at an exceptionally low level in relation to the evolution of new vehicle prices.

The observation already made by Marc Bruschet, president of the CNPA dealer branch, deserves to be placed at the heart of the analysis of what is happening in Europe and, depending on the interpretation of the figures and trends, resisting the political enterprise of the Euro NCap lobby will then appear important or not. read more

The encouraging beginnings of the French battery industry


 That France and Europe have put the battery electric vehicle (BEV) cart before the horse in research and the battery industry is fairly unanimously accepted. The problem now is to know whether the delay and the dependence that this implies on Asian players in general and Chinese players in particular can gradually be reduced. By agreeing to give up a certain number of symbolic battles, it seems to us that the French sector will have made quite a lot of progress in this direction this year. read more

German grand coalition, macro-economic context and electrification of the car market


 Germany's grand tricolour coalition draws a landscape where the will of the States and of Europe to support both activity and the investment necessary for the transition dominates. In a context durably structured around accommodating monetary policies, calls for a return to more orthodox budgetary policies will probably remain timid and this can only favour an electrification that would otherwise be more complicated. read more

Are the distribution groups ready to abandon the new vehicle for the used one?

The business model of distribution groups has been the subject of concern for years and in 2021 it will be close to breaking down, since sales of new cars to private individuals will reach historic lows and this is the moment that several manufacturers are choosing to seriously consider changing their model. Faced with this, when we have the opportunity to listen to a certain number of group managers, we perceive that they have another iron in the fire: the used car.
A large part of the automotive distribution galaxy was gathered for the Connect event organised by Auto-Infos on 18 and 19 November in La Baule to reflect on the future of the professions concerned.
read more

The growing need for cars in France is generating less and less business for the sector


Monitoring the car budgets of French families on a solid statistical basis enables us to verify whether or not phenomena on which we have only partial indications are true. The processing of the 2017 'Family Budget' survey, which we are comparing with the 2011 survey, confirms that, except in the Paris region, households are not turning away from cars but are continuing to equip themselves and to 'multi-equip'. However, they are doing so by making increasing use of second-hand vehicles and by ageing their fleets. As a result, the purchase of new cars is reduced to a minimum.

INSEE, like other national statistical offices, periodically examines family budgets by recruiting several thousand households to fill in very complete expenditure diaries. As the survey is very cumbersome and costly, it is only carried out every five or six years and it takes time to process.

Researchers have access to the files and can therefore do their own processing. This is what we did for the survey conducted in 2017, as we did for the 2011 survey. The comparison largely confirms trends that have been identified for years: the number of households is growing as they age, and while this allows for a slight increase in the turnover of the maintenance and repair and used vehicle business, it is not accompanied by an increase in new vehicle sales. read more

Truths and convictions: can the debate on the electric vehicle gain in quality?


Debates about electrification continue to be extremely passionate and too often focus more on beliefs than facts. Arguments that consist in saying that we know nothing or that the uncertainties are extremely heavy, as well as the more "conspiracy" arguments that claim that everything is being hidden from us or, in a softer version, that "we are being careful not to raise the issue of .... "We are in fact faced with an overabundance of information and studies that should allow us to have a quality debate on this key issue.

We remember that four years ago, when he was still hoping to curb the electrifying ardour of Brussels, Carlos Tavares accused the authorities of a certain lightness and, after concerns were raised in October 2018 about the content of the remarks he had made in Geneva a year earlier, he explained himself to Ouest-France in these terms:
"The warning I wanted to give a few months ago is that there are no [...] impact studies, no 360-degree studies of what 100% electric mobility means. EU governments and politicians are taking scientific responsibility for the choice of technology. read more

Will Elon Musk be able to turn his story into reality for much longer?


The start-up model and the fact that they claim the right to lose money and to be supported in their desire to grow for long periods of time blurs the lines of reference: where we usually deploy clear economic and accounting criteria at the end of which companies must be profitable, we are asked to 'change the paradigm' and try to assess the sustainability of the promise of success over time. The Tesla case shows that if a sufficient proportion of investors believe in it, the innovator can benefit for more than a decade from a kind of private subsidy regime that allows the company to operate at a loss and eventually be right against the sceptics. In 2021, armed with this history, Elon Musk is embarking on a new narrative and promising to build 20 million cars a year tomorrow. Will he still find the support of the markets? read more

Soaring commodity prices: a return to grace for automotive development policies in emerging markets?


Long-term experience of the economic and strategic debates concerning the automotive industry means that we have to recognise the existence of cycles. From this point of view, the truth at the beginning of the 2010s was that the presence in the emerging countries was a must, which for the last five or six years has become a kind of strategic ban (or dead end). Because it will allow some of these countries that have been reviled for several years to return to better fortune, the surge in commodity prices (including gas) could turn the cycle around.

So far, soaring commodity prices have been addressed as a problem of purchasing power for households and/or as a problem of higher manufacturing costs for many industries, particularly the most energy-intensive ones.

However, there is another side of the issue that deserves attention. It concerns the countries that benefit more than they suffer from these high prices, which are the result of a recovery in activity that was too imperfectly anticipated to avoid - temporarily, no doubt - these price pressures.
Normally, the "price signal" thus given should lead to the resumption of operations, the installation of new production capacity or even the exploration of new deposits, but before these adjustments take place, high prices are a rent for producing companies and countries. read more

How to address the Chinese electric vehicle issue in 2021?


For several years now, the electric vehicle has been a subject on which passion prevails and where faith too often plays a more important role than reason. In this context, there is the fear of being taken for a ride by Chinese competitors who, under the guise of decarbonisation, would have invented with their administration a war machine intended to dominate us or even to oust us. The reality is not so caricatured.

For those who fear the invasion of Chinese cars in Europe, the figures for the last two years are somewhat reassuring. They allow us to propose a slightly renewed analysis of the question: a manufacturer's presence in China is vital not only to access the volumes of the world's largest market but also to become part of a teeming ecosystem of innovation which will very probably act as an accelerator of the learning process necessary to accomplish the electric revolution which is only just beginning. read more

Will the car industry, which is addicted to short-time work, be able to stall without damage?


The end of the "whatever it takes" that is now in place in France is causing great concern and some other states are reluctant to dry up the funding of their short-time working schemes. In view of the automotive situation, these fears seem justified: it was very necessary to adopt these measures and it is now urgent to abandon them. However, we must be aware of the risk of seeing the painful issue of overcapacity reappear following these abandonments. The financing of short-time work allows manufacturers to live in a very artificial under-capacity situation: the return to normal is taking place.

Short-time working is a hard macroeconomic drug from which it will be difficult to withdraw. There has been much praise for the fact that the example set by the Germans during the previous crisis has been followed by most European countries in the face of Covid 19, and we were right: for companies as for the economy as a whole, preserving jobs and salaries when production must cease because it can no longer be assured and/or sold, makes it possible to avoid disaster and gives us a much greater capacity for recovery than if we had allowed the destruction of jobs and companies to take place. read more

The comeback of the new mobilities is taking shape


The 15 years that have passed have seen strong convictions rise and fall about the need for the global automobile to change profoundly. The connected vehicle, the autonomous vehicle, the electric vehicle or new mobilities have thus acquired and then lost in the eyes of some and others the status of an obvious obligation to make a revolution. The electric vehicle thus experienced a very strong upward wave during the 2008 crisis, then a very clear downturn before the wave rose again after 2015 to finally sweep the industry away. The "new mobilities" also seemed capable of profoundly changing the industry 10 years ago and have clearly been at the bottom of the wave in recent years. They may well emulate the electric vehicle and make a comeback. read more

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