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Customer LoginsSame-Day Analysis: French light-vehicle market continues gains in January 2016
France's light-vehicle market has continued with its upward trend in the first month of 2016.
IHS Automotive Perspective
- Significance: The French light-vehicle market has experienced growth during the opening month of 2016 with both passenger car and light commercial vehicle (LCV) registrations improving
- Implications: The market continues the momentum experienced in 2015.
- Outlook: Overall, IHS Automotive anticipates improvements in light-vehicle sales during 2016. We currently expect passenger car registrations to increase by over 3.5% year on year (y/y) and LCV demand to grow by around 7.5% y/y during 2016.
The French light-vehicle market has experienced growth during the opening month of 2016. According to the latest data published by the French Automobile Manufacturers' Association (CCFA), registrations of passenger cars and light commercial vehicles (LCVs) in January grew by 4.7% year on year (y/y) to 165,705 units. One fewer working day recorded this month - at 20 days versus 21 in January 2015 - did not help this. When this is taken in to account, registrations grew by 10.0% y/y.
The passenger car category helped contribute to this improvement, with registrations increasing by 3.5% y/y to 137,788 units. However, when the one fewer day is taken in to account, registrations grew by 8.6% y/y.
The two domestic automakers had a mixed month in the passenger car sector. PSA Peugeot-Citroën experiencedan increase of 3.2% y/y to 42,610 units, as all three of its brands recorded increases. The Peugeot brand led the way on a volume basis with registrations up by 2.8% y/y to 24,943 units. The Citroën brand also saw an improvement of 2.2% y/y to 15,204 units. However, the biggest percentage gain was in its DS premium brand, which recorded an increase of 14.5% y/y to 2,463 units. However, the Renault Group recorded a decline in registrations of 2.9% y/y to 32,051 units. Its namesake brand, of which registrations slid 4.1% y/y to 23,403 units, contributed to this decline, although it was partly offset by a marginal gain of 0.6% y/y experienced by its Dacia brand, to 8,648 units.
For foreign original equipment manufacturers (OEMs), the news has largely been more positive with some particularly strong gains being noted. Among them include the Volkswagen Group (+12.0% y/y), underpinned by double-digit percentage jump seen by Audi and Skoda. Toyota (+11.6% y/y), General Motors (19.0% y/y) and Fiat Chrysler Automobiles (+8.4% y/y) also recorded gains. Premium automakers also saw some gains with BMW Group (+32.7% y/y) and Volvo Cars (+23.5%), although Daimler did see a decline of 14.6% y/y as the Mercedes brand fell by around one-fifth. Daimler wasn't alone this month in its retreat, as Nissan fell by 23.5% y/y and Ford saw a dip of 3.9% y/y.
For LCVs with a gross vehicle weight of up to 5.0 tonnes, the rate of improvement has been far greater this month. The CCFA recorded an 11.6% y/y gain in registrations to 27,917 units, although when taking into account the one fewer working days, this gain stands at 17.1% y/y. During the month, both domestic OEMs recorded improvements, with PSA up 16.7% y/y to 9,930 units and Renault increasing by 8.6% y/y to 8,505 units.
Outlook and implications
The French light-vehicle market is beginning 2016 as it ended 2015 with a buoyant market performance. Last year was driven by the passenger car sector, which improved robustly as part of a normalisation process after the highs - caused by various government-backed incentives - and lows, owing to a payback effect and challenging economic conditions. During the year, its economy grew 1.0% in the first three quarters of 2015, and although improvement was expected in the fourth, this grew only 0.2% quarter on quarter (q/q). The situation was not helped by a decline in private consumption which fell for the first time in seven quarters; this is likely to have been affected by the terrorist attacks in Paris (France) in mid-November 2015. Additionally, unseasonably mild weather led to a sharp fall in the consumption of energy. However, consumption of goods, which account for around one-third of total consumption, declined by 0.8% q/q, despite a rebound in December. This was more than counterbalanced by a marked increase in investment spending, with growth at the strongest pace in five years, underpinned by businesses.
Looking forward, IHS anticipates that - excluding temporary factors - the economic outlook is for a gradual and modest recovery during the rest of 2016. Domestic demand should be supported by muted inflation, easing credit conditions, and modestly improving confidence. On top of keeping inflation low, supporting households' purchasing power, lower international commodity prices will also help firms to restore their profit margins. Assuming that business confidence continues to improve over the coming months, this is also likely to be reflected in rising investment spending. However, the recovery still faces many headwinds. In particular, the labour market situation will remain difficult, and unemployment will remain high, although we expect some stabilisation in 2016. Growth will not be strong enough to make a significant dent in France's elevated unemployment rate despite the measures implemented by the government earlier this year aimed at boosting employment. Job creation will also be limited by structural factors, such as elevated non-wage labour costs and employment protection legislation. Overall, economic growth is expected to grow by a further 1.3% in 2016 and on to 1.5% in 2017.
Overall, IHS Automotive anticipates improvements in light-vehicle sales during 2016. We currently expect passenger car registrations to increase by over 3.5% y/y and LCV demand to grow by around 7.5% y/y during 2016. This will bring these categories even closer to the levels recorded during pre-crisis times, although it is unlikely to be until the next year or so that normality is achieved.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.