With France’s manufacturers producing around 10 million passenger cars annually worldwide, the country supports one of the largest automotive markets. But how are its industry-leading brands adapting to new powertrains, digitalization and the changing needs of the consumer? In this interview, Christophe Bertoncini, Operations Director, France, MSX International, discusses the transformation in this market, and how businesses are facing the challenges ahead.

Who are the dominant automotive brands in France, and what has helped them win the market share?

Cars manufactured in France are generally inexpensive, well made and easily repaired, making certain brands very popular with French consumers. Two main players – Stellantis Group and Renault – have snapped up around 60% of the light vehicle market share. Stellantis is an excellent example of how strategic mergers and acquisitions in the automotive sector are helping businesses to strengthen OEM operations in the face of disruption and digitalization. The organization formed through the merger of Fiat Chrysler Automobiles and Groupe PSA, and encompasses 14 brands including Peugeot, Citroen, DS, Opel and Fiat. The group’s mission is carbon neutral mobility, and it positions itself as a ‘leading global mobility player’.

Meanwhile, Renault remains one of the top-selling car makers in the French market and, according to its media website, is the leader in electric and hybrid vehicles. Renault Group has also recently acquired a stake in heycar Group, an online used-car sales platform, helping strengthen its digitalized offerings.

Does the positioning of brands as mobility providers rather than vehicle manufacturers reflect the expectations of consumers?

For consumers in France, the concept of using vehicles for mobility rather than for private ownership is still in its infancy, but the model is growing rapidly in popularity, particularly in the big cities. Here, vehicle owners receive a grey card (carte grise) which is a registration certificate and proof of ownership. Traditionally, new drivers have viewed their grey card as a rite of passage. But today, the growth in leasing means fewer drivers receive a grey card, symbolizing the starting point in a new era of mobility.

Vehicle leasing is, for many, more affordable and highly practical. The ownership of a car once represented freedom, but the consumer’s mentality has changed, and the definition of freedom is now the ability to choose from the wide variety of options available. These include car sharing schemes, currently offered in some cities. Using the Free2Move app, for instance, customers can simply book a car located near them, unlock it, drive it to a new destination and leave it in a designated space. There’s also an increase in the rental of vehicles with more than 15% of French passenger cars now leased long term.

The rise in fuel prices may also be driving the consumer towards alternative mobility options which provide them with a vehicle for essential journeys only. People are conscious of the need to reduce unnecessary travel, eliminate inefficient driving and optimize their journey routes to cut costs.

Does the increase in alternative mobility options suggest that fleet business is expanding in France?

The increase in workplace salary sacrifice schemes and company cars has driven a significant rise in the number of fleet businesses in the region, and car rental organizations are working more closely with manufacturers to make short-term hire more accessible to consumers. For example, car makers are selling passenger cars or light commercial vehicles to large supermarkets where consumers can rent them from short-term leasing agencies such as Avis or Budget. Some supermarkets, including Super U, Intermarché and Carrefour, provide fleets of 100-plus cars at their locations.

What is the status of electric vehicle (EV) adoption in France compared to other markets?

The global shortage of silicon chips is still affecting supply chains across the region and production of all new vehicles has been badly hit, making it more difficult for manufacturers to plan production to meet EU emissions targets. Despite this, EV sales are strong. A Frost & Sullivan report shows that in 2020, France was second only to Germany in the European EV market, selling more than 194,000 units. Meanwhile, Chinese EV brands are making their move into the region, challenging the dominant French players to deliver more competitive products.

Passenger car figures from AAA Data show that in October 2021, EVs accounted for 13% and hybrids (including plug-in hybrids) accounted for 28% of total registrations – a proportion that’s increasing steadily, although range anxiety is still a valid concern. Many drivers commute 100 km a day or more, so a vehicle with a battery range of less than 200 km is not a viable option. And charging points aren’t yet as easily accessible as they need to be. According to an ACEA report on the distribution of EV charging points in EU markets, there are 4.1 chargers per 100 km in France. Germany has 19.4 per 100 km. Even though most drivers generally travel shorter distances daily, they need more confidence in the availability of charging points, and new schemes are making that possible. The French government has recently announced a €100 million funding program to support the installation of fast charging stations for electric cars.

OEMs are also encouraging their dealers to install charging points. The aim is to provide incentives to drivers such as lower cost charging, helping to draw in customers and boost retention among owners of vehicles that no longer need such frequent servicing.

How can manufacturers overcome EV sales and adoption challenges?

OEMs need to work more closely with their dealer networks to prepare for the acceleration in EV adoption. Dealers must be ready with the right tools, accessories and sales techniques. And they need the knowledge to answer technical questions about vehicles and practical questions about driving them.

The management of multiple powertrains – petrol and diesel, EV and hybrid, and in some instances, hydrogen – under one roof, is highly complex. Technicians must be able to fix all engines, so it’s crucial they’re well prepared through continuous and ongoing training and equipment upgrades.

Customers of EVs and hybrids expect a different experience to the one they have traditionally received and are far more prepared than they’ve been in the past. People spend hours online researching products to understand their features and benefits. When they finally visit the dealer, they require salespeople to provide more specific or technical details about vehicles.

What do you think the future of the automotive industry in France holds?

In France, most of the population lives outside of the big cities, so people will always need a vehicle in some form. But the sheer scale of disruption and change affecting the industry means car manufacturers and dealerships must be prepared to adapt, to become more professional and stronger, and deliver flexible solutions that ensure their vehicles retain their integral place in society.

It’s hard to predict the future, but one thing is certain, and that is, in the next five or 10 years, we will see more changes than we’ve seen in the last century. The automotive businesses who prepare well are those most likely to thrive.