French Car Manufacturers Are Doomed

[chris25]

Mainstream European carmakers have been hit by a huge sales decline, as new car sales crashed by nearly 10 per cent in February. The biggest losers in the worst single month for European sales since autumn 2010 were Renault, Peugeot-Citroën, Opel/Vauxhall, Fiat Group, Suzuki and Mazda. On the upside, Chevrolet, Mini, Mercedes, Jaguar and Land Rover all made significant sales advances.

In the first two months of the year, Renault sales plummeted by 28.5 per cent to 129,455 units and Opel/Vauxhall was down 20.3 per cent to 113,554 units. Peugeot was down 18.3 per cent (125,525) and Citroen 12.8 per cent (111,650).

Fiat brand sales dropped 18.6 per cent and Alfa dropped 28.5 per cent to sales of just 16,466.Other double-digit losers included Toyota, Suzuki, Mazda and Seat. Honda and Mitsubishi were down 29.3 per cent and 27.5 per cent, respectively.

The biggest single gainer over January and February was Jeep, up 57.3 per cent, from a modest 2674 units to 4206. Land Rover leapt 54.5 per cent to 13,779 units on the back of runaway Evoque sales.

Jaguar was up 10.5 per cent and Mini 9.9 per cent. Kia jumped by 30 per cent, Chevrolet by 22 per cent and Hyundai by 11.7 per cent.

From Autocar

Amazing that Renault sales are almost down 30%!

I have noticed year after year that less and less people are buying Peugeot, Citroen or Renault cars and buying a Kia or Hyundai instead. It is amazing how the Korean cars, once hideous and deformed looking, now actually look quite good (if a little bland).

Also its not just the French who are in trouble, look at Alfa with another 30% drop.

[Killer Bunny]

If there were capitalism they would be toast but we do not have capitalism.

[Wurzel Of Highbridge]

Why would no one buy a beautiful French car?

[Democorruptcy]

Volkswagen- Renault?

Final question at Draghi's last press conference:

Question: Volkswagen has said that it took some money via the LTRO. It has confirmed that they participated in the second LTRO and there have been reports that some other companies with financing arms have taken money. I am just wondering if you could first of all tell us what was the scale of that type of borrowing, and secondly, was it a desired result or was it an unintended consequence? How do you feel about that kind of borrowing?

Draghi: I don’t really have any reaction to that, but I don’t think they must be awfully relevant. The fact is that there are some companies that have very large treasury positions and have the status that allows them to access these facilities. So they are acting within the law.

http://www.ecb.europa.eu/press/pressconf/2012/html/is120308.en.html

Volkswagen boss seems to be doing OK:

Martin Winterkorn earned a total of 17,456,206 euros in 2011, more than doubling his salary the previous year, according to Volkswagen’s annual report. The salary was broken down into 1.89 million euros in basic pay, a bonus of 11.04 million euros and a “long-term performance bonus” of 3.67 million euros. The remaining 860,000 euros was pay not received in 2010. The sum “is the highest ever earned by the head of a company in the DAX

http://www.news-uk-online.co.uk/?s=volkswagen+boss+salary

[Frank Hovis]

I am astounded that anybody would buy a Citroen with their reliability record, they don't even look good. Driving one screams "I know nothing about cars and bought the first thing I saw" more than any other car could.

[interestrateripoff]

If there were capitalism they would be toast but we do not have capitalism.

If we had capitalism the price of new cars would fall with over-supply.

Looks like the debt junkies need another fix to buy a new car.

[davidg]

I am astounded that anybody would buy a Citroen with their reliability record, they don't even look good. Driving one screams "I know nothing about cars and bought the first thing I saw" more than any other car could.

The DS3 is interesting but I wouldn't buy a citroen due to the poor reliability, I'm basing that on the number I see broken down on the roads as I drive around. Renault seem to be bearing up due to having outsourced a lot of their car building, it looks like a full merger with Nissan is on the cards if the French govt can stomach it, not before May though.

[zugzwang]

European car production capacity: 15-20m.

European car sales (2011): 12m.

European car sales (2012): 10m.

Everybody is losing $millions and will continue to do so until we see multiple plant closures. GM will start by shuttering Vauxhall Ellesmere and the rest of the industry will follow.

[scrappycocco]

we make enough good cars in this country, i don't know why people don't by them and support manufacturing.....

[AThirdWay]

The DS3 is interesting but I wouldn't buy a citroen due to the poor reliability, I'm basing that on the number I see broken down on the roads as I drive around. Renault seem to be bearing up due to having outsourced a lot of their car building, it looks like a full merger with Nissan is on the cards if the French govt can stomach it, not before May though.

Citroen are fair to middling when it comes to reliability. Renault however, they don't do very well at all!

What Car Survey

There are a lot of big names further down that chart, but the poor old Landy is last! Followed by the two Merc coupes.

[stuckmojo]

The DS3 is interesting but I wouldn't buy a citroen due to the poor reliability, I'm basing that on the number I see broken down on the roads as I drive around. Renault seem to be bearing up due to having outsourced a lot of their car building, it looks like a full merger with Nissan is on the cards if the French govt can stomach it, not before May though.

I agree. Citroen is doing the right thing with the DS range and Peugeot seems to have sold shitloads of their 3008 "ALDI" TT replica, all in white, diesel with massive bling wheels to blonde women.

Why would anyone buy any of these is beyond me, though. Colossal depreciation and crap reliability means you could run a used Porsche 911 for much much cheaper. (that's my plan by the way).

The reality is that nearly all new cars are bought on finance, and all it matters to the peasants is the monthly payment. That's why they go to the Evoque and avoid the Fiats.

[@contradevian]

The French clearly have it all wrong. They should have gone into banking and becoming an "information" and service economy like the successful UK.

[RufflesTheGuineaPig]

Try and remember that the French have a strong sense of nationalism, and will always favour their own cars, no matter how bad they are.

[bankfeeder]

we make enough good cars in this country, i don't know why people don't by them and support manufacturing.....

Because people buy cars for other 'reasons' than supporting the local economy. I don't think people ever buy for just that reason, but only if they actually believe that their own home grown stuff is the best. The French actually do believe that, which is why they carry on buying their own stuff, despite evidence to the contrary.

We as a nation talked ourselves into thinking we were no good, so we then went ahead to fulfill that prophesy.

All buying is driven by the subconscious mind.

[newbonic]

European car production capacity: 15-20m.

European car sales (2011): 12m.

European car sales (2012): 10m.

Everybody is losing $millions and will continue to do so until we see multiple plant closures. GM will start by shuttering Vauxhall Ellesmere and the rest of the industry will follow.

I can remember checking the production vs sales capacity of the global auto trade back in 2008 when the price of oil spiked. IIRC the world's car and light truck (that's pickups and 4X4s etc) capacity was circa 100m vehicles per year. Sales were at about 60m per year. So a huge oversupply has been endemic for a decade of more.

I'm surprised that 4 years later it's gas guzzlers from the likes of Jag Landrover that are doing well rather than economical French diesels (altough I believe a lot of French diesels are driven around in other marques vehicles.). Maybe its the peasantry that's taking the main financial battering while the wealthy are holding up relatively well?

Edited March 16, 2012 by newbonic

[bajista]

I've always been partial to French cars.

Italian cars are all style but sadly usually no engineering. German cars are now like American and Asian cars- all engineering and no style ( although M-B and VW used to be stylish in 70s). French, especially Renault, are something in between - which is what you need for a functional object which is always on display.

Shame if that ends and I have to drive just a box with wheels

[Saving For a Space Ship]

I am astounded that anybody would buy a Citroen with their reliability record, they don't even look good. Driving one screams "I know nothing about cars and bought the first thing I saw" more than any other car could.

Perhaps buyers are swayed by the top mpg figures (excluding hybrids) ?

http://fuel-economy.co.uk/stats.shtml

Most Fuel Efficient Cars

This table shows the top 10 most fuel efficient cars that you can get in the UK today, based on their Combined fuel efficiency figure. Unsuprisingly, diesel superminis are dominating the top positions.

What we thought was fairly interesting was that the Toyota Prius - long hailed as the defacto "green" car - just scrapes into our list at 10th place! However, to be fair on the Prius's electric benefits when we look at only the urban cycle (not shown here) the Prius comes in in 4th place, behind the Insight, and C3 and C2 1.4 HDI SensoDrives. All this leads us to one question - when are the car manufacturers going to start making a hybrid diesel supermini?

Manufacturer Model Specification Fuel Type Transmission Combined MPG VED Band

HONDA Insight Insight Petrol Hybrid M5 83.10 A

CITROEN C2 1.4 HDi Diesel M5 68.90 B

CITROEN C1 1.4 HDi Diesel M5 68.90 B

RENAULT Clio 1.5 dCi 80 Diesel M5 67.30 B

CITROEN C2 1.4 HDi SensoDrive Diesel A5 67.30 B

CITROEN C3 1.4 HDi Diesel M5 67.30 B

RENAULT Clio 1.5 dCi 100 Diesel M5 65.80 B

RENAULT Clio 1.5 dCi 65 Diesel M5 65.80 B

CITROEN C2 1.4 HDi Diesel M5 65.70 B

TOYOTA Prius 1.5 VVT-i Hybrid Petrol Hybrid E-CVT 65.70 B

Edited March 16, 2012 by Saving For a Space Ship

[R K]

I agree. Citroen is doing the right thing with the DS range and Peugeot seems to have sold shitloads of their 3008 "ALDI" TT replica, all in white, diesel with massive bling wheels to blonde women.

Why would anyone buy any of these is beyond me, though. Colossal depreciation and crap reliability means you could run a used Porsche 911 for much much cheaper. (that's my plan by the way).

The reality is that nearly all new cars are bought on finance, and all it matters to the peasants is the monthly payment. That's why they go to the Evoque and avoid the Fiats.

You can 'rent' a new fiat for a couple of hundred quid down.

Btw, check out the costs of servicing/repairing your 911 before you take the plunge. The price paid for a car is only c. 25% of its 'lifetime' cost. Are you ready for the 400%+?

It's pretty obvious we're headed towards another round of 'scrappage' or other subsidies, or 'correctionism' unless Europe is ready to lie down and be over-run by the Koreans (and their subsidies).

[@contradevian]

I'm surprised that 4 years later it's gas guzzlers from the likes of Jag Landrover that are doing well rather than economical French diesels (altough I believe a lot of French diesels are driven around in other marques vehicles.). Maybe its the peasantry that's taking the main financial battering while the wealthy are holding up relatively well?

My French 2.2 HDI diesel has basically a "Ford" engine.

http://en.wikipedia.org/wiki/PSA_HDi_engine

Edited March 16, 2012 by "Steed"

[the gardener]

I am astounded that anybody would buy a Citroen with their reliability record, they don't even look good. Driving one screams "I know nothing about cars and bought the first thing I saw" more than any other car could.

That's not true of the Berlingo Multispace or the Citroen C1. Both very reliable cars and a very good value. Had my Berlingo 8 years and the C1 nearly 5 years. Only non-routine bits replaced is the starter motor, door handle, and fan motor on Berlingo and water pump on C1. Not bad considering.

Edited March 16, 2012 by the gardener

[fluffy666]

My French 2.2 HDI diesel has basically a "Ford" engine.

http://en.wikipedia.org/wiki/PSA_HDi_engine

I thought my Focus C-Max 2.0 TDCi had a French HDi engine..

Still.. 136bhp in a car that is basically made out of tin foil and plastic is fun (until the DMF, DPF, Turbo and injectors all fail at the same time, of course).

[winkie]

we make enough good cars in this country, i don't know why people don't by them and support manufacturing.....

...not got a problem with that....one thing I have noticed is that the French buy their own cars, most of the cars on French roads are French.

[The Ayatollah Buggeri]

Interesting - sales of average cars bought by people on average incomes have fallen, while luxury cars bought by bankers, public sector managers etc. have experienced strong sales growth.

[Blue Peter]

Interesting - sales of average cars bought by people on average incomes have fallen, while luxury cars bought by bankers, public sector managers etc. have experienced strong sales growth.

But that strong sales growth could be even stronger if we can just reduce the tax that they pay. What's that? It'll mean reducing government revenues in a time of high deficits? Never mind, we can cut some of the things that we give to the average and poor people.

Job done,

Peter.

[winkie]

Interesting - sales of average cars bought by people on average incomes have fallen, while luxury cars bought by bankers, public sector managers etc. have experienced strong sales growth.

Yes...the rich can afford to run them, filling the tank up is peanuts to them, add to that the purchasing power of the emerging economies with money to burn, nothing but the best, for people that can buy the best they can get....driving the right model is to show others their importance, their standing, their wealth, their status and how well they have done for themselves....each to their own, whatever makes them feel good I suppose.