France Full Year 2016: Private sales under 50% share for the first time

January 10, 2017
Matt Gasnier

The Renault Clio is #1 in France for the 6th year in a row.

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New car sales in France gain 5.1% year-on-year in 2016 to get back above the 2 million mark for the first time since 2011 at 2.015.186 registrations, or almost 100.000 additional sales compared to 2015. This result ranks among the highest ever volumes in France, where roughly 2.2 million units were sold in 1988, 1990, 1991, 2009, 2010 and 2011. The big, symbolic news in France in 2016 is private sales falling under half of the market for the first time in history due to a meagre 0.9% gain to 993.795 registrations or 49.3% share vs. 51.4% last year. To give perspective to this situation, private sales represented 75% of total registrations in the nineties and were still at 66.4% in 2009. So what is happening in France?

Almost all sales gains for the year are due to business sales including long term leasing, short term rental sales, dealership self-registrations and demo sales. All of the above is labelled “artificial” sales channels as they can be easily manipulated by manufacturers to reach sales goals. Business sales are up 7.8% to 422.430 units or 21% share, representing one-third of the 2016 overall market gain and short term rentals are up 9.7% to 11% share. The one channel that has been the most effective at fuelling the overall French market gain is the artificial channel par excellence: demo sales, up a mammoth 13.7% to 301.828 units and 15% share vs. 13.9% in 2015. Of all trends affecting the French new car market in 2016, this is the core one: manufacturers and dealerships now self-register unsold cars to discount them as “zero km second-hand”. This enables them to satisfy demand from French customers affected by the reduction of their purchase power.

The Peugeot 208 is up 8% on 2015 but remains in 2nd place. It is #1 with private buyers.

The second striking trend in France is a continuation of 2015: leasing. In French LOA (Location avec Option d’Achat – Leasing with Purchase option) and LLD (Location à Longue Durée – Long Term Leasing), this financing option is also is in line with the difficulty of French customers to follow the premiumisation of the car market, treating the car purchase as a subscription. A record 27.6% of all private sales or 274.148 units have been purchased through leasing in 2016, up 31.7% on 2016. 26.7% is LOA and 0.9% is LLD. In the business sales channel, 49.9% of total units are purchased through LLD and 26% through LOA, resulting in a 75.9% leasing market share. This way, the overall share of leasing in the total French market in 2016 stands at a record-high 35.4%.

In this changing context, Renault benefits from the renewal of its lineup, beating the market with a 7% gain to return above the symbolic 20% share mark (20.2%), while Peugeot is up just 3% to 16.7% share vs. 17.1% last year. Citroen struggles, down 3% to plunge below 10% for the first time in decades at 9.7%. Volkswagen manages to limit the effect of its emission scandal at -1% to 7.1% share but Dacia continues to gallop ahead at +13% to hit its highest ever annual volume in France, above 110.000 units. Ford (-2%) is getting caught up by Toyota (+8%) while Nissan (-7%) is threatened by Opel (+6%). Fiat (+15%), Kia (+16%), Hyundai (+17%), Suzuki (+12%), Mazda (+23%), Jeep (+16%), Honda (+25%) and Alfa Romeo (+15%) also shine.

Audi remains the #1 luxury brand, but Mercedes and BMW keep the pressure.

The leasing trend has benefited premium brands in a big way in France, making their purchase a lot more digestible, with all Top 3 luxury brands improving by double-digits. Audi (+10%) remains in the lead but its advantage over Mercedes (+12%) is now just 2.626 sales, with BMW (+13%) lurking 4.165 units behind: the three Germans fit within 0.2% market share in 2016… Other luxury brands positively impacted by leasing – and new models – include Mini (+12%), Volvo (+12%), Lexus (+14%), Land Rover (+17%), Tesla (+33%), Maserati (+44%), Jaguar (+144%) and Infiniti (+189%).

With sales up 3% to 5.6% share, the Renault Clio posts a 6th consecutive year in the French pole position, now adding up to 18 annual wins in the past 26 years, the first one being in 1991. Make no mistake, the Peugeot 208 isn’t dead yet: it ranked first four times in 2016 (January-April-July-August) vs. three in 2015 and just once in 2014, and is up 8% to 4.9% share. The Top 5 best-sellers are unchanged with the Peugeot 308 (+0.04%), Renault Captur (-2%) and Peugeot 2008 (+4%) following. The Dacia Sandero surges 24% and 3 spots to land at a record 6th position, the Renault Mégane IV ranks 8th for its first full year of sales but remains far from the 308, the Citroen C4 Picasso (#9) leads its segment but will be outsold by the Renault Scénic IV in 2017 and the Renault Kadjar ends 2016 at a brilliant 12th place but was frankly outsold by the new gen Peugeot 3008 during the last two months of the year. Like in 2015, there are no foreigners in the Top 10: the VW Polo (#11), VW Golf (#14), Toyota Yaris (#15) and Nissan Qashqai (#18) dominate that ranking.

The Dacia Sandero was #1 with French private buyers for a large part of the year.

The Clio only owes its pole position to fleet sales: private sales only represent 39% of the Clio’s overall deliveries and are down 9% this year to third place whereas the nameplate still comfortably dominated this channel in 2015. Instead, the Peugeot 208 takes the lead with private sales up 5% and representing 50.4% of its overall volume – in line with the market. The big surprise comes from the Dacia Sandero, which was the French favourite with private buyers for a large part of the year, only losing its YTD leadership to the 208 in the last weeks of December. 87% of Sandero volumes are realised through private sales. Like last year, the Peugeot 2008 (#4) outsells the Renault Captur (#5) with private buyers. Among the Top 10 private sales, notice also the Dacia Duster (#7), VW Polo (#9) and Toyota Yaris (#10).

The French Light Commercial Vehicle market is up by a robust 8% year-on-year in 2016 to 410.097 units and Renault up 6% remains the master in command with a market share (32.1%) superior to that of its two French competitors combined: Peugeot up 10% (16%) and Citroen up 5% (15.2%). Fiat (+14%) and Ford (+13%) outpace the market to lodge improved shares, with Volkswagen (+12%), Iveco (+18%) and Nissan (+39%) also in great shape. Model-wise, the Renault Kangoo (+9%) delivers a 19th consecutive year at #1, distancing the Renault Clio (+3%), Citroen Berlingo (+7%) and Fiat Ducato (+13%). Boosted by the new model, the Citroen Jumpy (+23%) posts the largest gain in the Top 10, with the Peugeot Expert (+38%), VW Transporter VI (+448%), Ford Ranger (+46%) and Nissan NP300 (+136%) also making sparks further down the ranking.

Citroen Jumpy sales are up 23% to break into the French LCV Top 10.