Private individuals represented 59 percent of the personal car market share in 2010. Over the past three years, its level has fallen and is reflected by a specific market: the company car market, according to ALD Automotive.
ALD noted that the private sector demand has seen a downturn and there’s hesitation about buying new cars. For instance, there are no longer scrappage scheme subsidies available, and the current economic situation is not favorable. Vehicle companies are experiencing both stagnation of demand and credit tightening.
France experienced four consecutive quarters of decrease from 2011 Q4 to 2012 Q3. In 2012, the entire non-household passenger single-car registrations contributed negatively to the growth of the passenger car market, which fell by 6.3 percent. But, the corporate market has fared better than the retail market. The further tightening of bonus-malus rates for companies — which went into effect Jan. 1, 2013 — generated a relatively modest anticipation effect that was limited to December 2012. On the other hand, it is likely to change the structure of the automotive market in 2013, ALD noted.
In 2012, the French full-service leasing (FSL) and fleet management market represented 1,418,221 vehicles managed, an increase over the 2011 market of 1,381,292, including personal cars and light commercial vehicles, split between 1,161,517 for the FSL and 256,704 for facility management. The FSL market gained 1.68 percent over 2011. In 2012, the long-term rental market counted 416,727 new-vehicle registrations, a fall of 2.4 percent vs. 2011, but up by 6.7 percent over 2010. The auto market in France experienced an historic year in 2011 with more than 426,800 new registrations, according to ALD.
ALD said the reason lies in the post-2008 crisis returns. Four years ago, companies extended their contracts. It is also important, to be statistically correct, to compare the numbers with 2010 results.
As the 2011 market took advantage of the post-crisis 2008 returns, vehicle returns had reached an historically high level of 394,500 (10-percent more than 2010), and, in 2012, vehicle returns remained dynamic and grew by 1.7 percent to 401,240. The difference between new registrations and vehicle returns has, therefore, fallen sharply, limiting the growth of the total stock of long-term rental vehicles. Similar to 2008, customers have a tendency to extend their contract.
The fleet management market increased by 7.4 percent over its 2011 level to 256,704, with the French government continuing to outsource. In 2012, ALD Automotive, DIAC, Credipar, and Arval represented 72 percent of the French fleet market, with ALD Automotive and DIAC sharing the biggest market share. Without productivity gains, in a context of falling profits and a low demand, the situation in the French fleet market is likely to be challenging for services and industry, according to ALD.
Only non-household segments are growing in terms of market share, which can redefine the automotive landscape industry. At the end of 2012, the tactical channels (demonstration and makers) increased. These channels are used by car manufacturers to strengthen their market position or achieve a sales target. This is the only way for them to have positive results, whereas this kind of sales is not reflecting the automotive industry results.
Some cars might remain a niche market in the near future to relaunch the growth, such as electric vehicles. But still, even with some French determined manufacturers, this niche market will not save the global car market, according to ALD.
In 2013, the new passenger car market was expected to fall by 1.3 percent in the non-household segment. The volume of new registrations could decrease by 3 percent with long-term rental, as customers may decide to extend their contracts.
● Capital: Paris