France is the fourth largest European automotive market after Germany, the U.K. and Italy. With an estimated registered 2,584,035 new (not including second hand) passenger and utilitary vehicles in 2007, France is facing difficult times as both car production and demand have decreased. On the other hand, the average life span of cars is increasing and a higher number of used cars were registered.
French automotive parts suppliers' sales reached approximately USD 38.9 billion in 2007 (a figure comparable with 2006). Thanks to a dynamic first semester 2008 in terms of car production, French automotive parts suppliers managed to stabilize their sales in 2008. The drop in production and demand of passenger cars in France, which started in mid 2008, will continue to affect automotive parts suppliers in 2009. Figures for 2008 and 2009 are estimations only, based on the current economic situation worldwide.
The main categories of automotive parts included in these figures are: power train equipment (40.2%), vehicle interiors (30.3%), tire-to-road link components (14%), body components (11.9%) and equipment for measurements, checks, diagnostics and repairs (3.6%). This equipment is sold to the OEM market (Original Equipment Manufacturers) and the aftermarket, which includes the OES (Original Equipment Suppliers) and the IAM markets (Independent Market).
France's automotive trade deficit with Germany and U.K increased by 41.4% and 2.2% respectively while the trade balance with Spain remained positive (+30.2%). Outside of Europe, where France achieved more than 83% of its sales, the sector's balance surplus with China deteriorated significantly (- 43.6%).
OEM auto parts sales reached approximately USD 32.4 billion, a 2.2% decrease compared to 2007, mainly due to the decrease of French car production. All product categories suffered except air supply components and electrical equipment for engines, controls for transmission systems and exhaust line components.
On the other hand, automotive parts suppliers' sales to the aftermarket (OES + IAM) increased by 2.1% to reach approximately USD 6.5 billion in 2007. This evolution is mainly due to two factors: 1) the increase in the number of second hand registered light vehicles (passenger and light commercial cars), and 2) the average age of light vehicles, which exceeded 8 years in 2007. Product categories which were successful in 2007 were: fuel circuit components, engine components, air supply components and electrical equipment for engines, controls for transmission systems, and body components.
This report does not cover consumable products for the automotive aftermarket, which is another product category. It is important to note that generally product lines in auto centers, automotive departments in supermarkets or in independent automotive professional shops are less extensive than in the United States. There is room for embellishment products to a certain degree.
Best Products/Services
The automotive parts market in France is dominated by big multinational firms, many of them American with French or European operations. The FIEV (The French Vehicle Equipment Industries Association) regroups the main parts and equipment suppliers in France. Large U.S. suppliers are already present in France and are doing well. Among the twenty top suppliers, eight are American (Delphi, Visteon, Johnson Controls, Lear, TRW Automotive, Dana, Arvin Meritor, Federal Mogul). There is little or no room for mid-sized exporters in this very closed environment, where competitive requirements, transportation costs, etc., make it very difficult for firms not physically established here to sell their products to OEM and OES. U.S. industry generally supplies the French market from its European subsidiaries or via local joint ventures. Direct imports from North America decreased in 2007 to reach 820 million dollars. The trend is still to source in foreign countries such as China, Japan, Taiwan and India to the detriment of the USA.
The FIEV, the French Vehicle Suppliers Association, has mapped the evolution of the supply chain, and it is obvious that French manufacturers encourage their key suppliers to co-locate in manufacturing plants adjacent to the in-country assembly operations, or in European countries close by. Since France's exports and imports of parts and components and assembled vehicles are largely within the Euro zone, the use of Euro as a transaction currency is a determining factor in source selection.
Most of the larger vehicle manufacturers have rationalized their suppliers' base of components and sub-assemblies and have stopped manufacturing parts in-house wherever possible. The trend is toward Tier One suppliers that provide complete sub-assemblies of parts sourced from the variety of Tier Two and Tier Three component manufacturers. Key suppliers are gaining greater competence in modules, systems, and even complete vehicle manufacture and have to meet the highest standards to be able to compete in this industry.
Opportunities
Opportunities for U.S. suppliers will be on highly technological products or those that are innovative in the context of the environment, or security and safety. On board communication tools are enjoying good growth.
Resources
EquipAuto 2009-Trade Show - October 13- 18, 2009
Website: http://www.equipauto.com
French Vehicle Equipment Industries Association
Website: http://www.fiev.fr
French Association of Automotive Independent Distributors
Website: http://feda.fr
Embassy U.S. Commercial Service Trade Specialist: Stephanie.Pencole@mail.doc.gov
Phone: (33-1) 43 12 71 38
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