French Automotive Market March 2022: The Decline Continues

A Historic March 2022? The new car market continues to decline, and electric vehicles are set to double diesel sales.

Who would have believed such a thing? The market for new passenger cars has decreased by 19.5% compared to March 2021. This is the tenth consecutive monthly decline since June 2021.

The market remains in the red

Amid the health crisis, parts shortages, and the war in Ukraine, all indicators are trending downward and turning red. In France, 147,079 new cars were registered last month, compared to 182,774 in March 2021. Compared to 2019 (225,818 sales), this figure is quite alarming.

Since the beginning of the year, 365,361 new cars have been registered in France according to the PFA. That’s 17.3% less than in 2021, and 34% less compared to the first quarter of 2019, the last normal start to the year before the pandemic.

For once, the used car market isn’t doing much better. Despite a notable upswing over the past three years — with a record broken in 2021 (surpassing six million vehicle registrations) — used vehicle sales declined by 14.3% in March. Buyers, discouraged by the lack of new vehicles, are turning more to the used market.

But dealers are taking advantage of the situation, and some prices are starting to become unreasonable… Add to that the tense atmosphere we’re living in, and this poor March begins to have understandable explanations.

Often the same brands that do best

“In an overall market still in heavy decline, brands like Kia, Hyundai, and Tesla are managing to show solid growth, even compared to 2019,” says Marie-Laure Nivot, Market Intelligence Manager at AAA Data. “The top-selling models among private buyers, with Dacia Sandero and Tesla Model 3, illustrate the market’s polarization between models targeting affordability and those focused on tech content at much higher prices.”

However, Dacia like others is increasingly struggling to deliver, and Tesla, which has pulled the Model 3 from the catalog as all 2022 production is sold out, is preparing for a difficult relationship with customers. Notably, the resilience of Korean brands, whose French presidents have done excellent early stock planning, allowing them to satisfy customers despite tightening delivery times, is worth mentioning.

In France, only Tesla (+46.5%), Hyundai (+7.2%), and Kia (+4%) show increasing figures. French manufacturers, however, are experiencing significant declines, with Peugeot, still the leader, dropping 28% behind Renault. Dacia and DS are limiting the damage but at low levels.

The Top 10 Brands in March 2022:

1. Peugeot 21,599
2. Renault 20,887
3. Citroën 13,843
4. Dacia 12,719
5. Volkswagen 10,096
6. Toyota 7,584
7. Ford 6,088
8. Mercedes 4,890
9. Tesla 4,850
10. Kia 4,502

Electric vehicles almost equal to diesel!

This is the big joke about this quarter’s auto market: Diesel, which accounted for 77% of sales in France in the late 2010s, now only makes up 14% of registrations in March 2022. It’s just 1% more than electric vehicles, fueled by government incentives and fossil fuels at over two euros per liter.

Among brands selling the most zero-emission models, the leaders include:

• Kia with 26% of its sales in the e-Niro
• Hyundai with 21% via its Kona and Ioniq 5
• Fiat, with 48% of its 500e city car
• Mini with its Electric variant (22%).

Overall, while diesel loses 50% of its market share and hits a historically low level, electric vehicles grow by 27% and double their share to 13.4%. However, as 100% electric models continue to improve, mild hybrids and plug-in hybrids see reduced demand, down 9%. In this so-called ‘average electrification’ context, only standard hybrids are trending upward.

Finally, alternative fuels (GPL, E85 bioethanol) continue to attract a growing number of buyers, skyrocketing by 152%. However, they only represent 6% of sales. Mainly Dacia for GPL and Ford for E85, simply due to limited availability. Just three or four manufacturers committing to this path could see diesel and even electric vehicles surpassed.

2022: the worst year in 40 years for the auto market?

Will the French auto market remain in the red all year, making 2022 a black year for car sales? That’s what delivery figures seem to suggest, which don’t align with order books that are still relatively full. But manufacturers are struggling to supply, and even to commit to serving their customers before the year ends.

This is not a new or French-specific issue. With only 9.7 million vehicles sold in Europe in 2021, new car registrations are sluggish. One might compare 2021 to 2013 or 1993, years regarded as some of the worst in recent decades. Two underperformances for France, both linked to artificial support (Jupette, Baladurette, Sarkozette) that initially inflated the market before causing a downturn the following year (not everyone needs a new car that often…).

What does 2022 have in store for us? If the trend that started in June 2021 continues, not much good. Automakers are imposing new fuels and cars that consumers can’t always afford. Meanwhile, the distribution network will have to live with full order books and empty delivery slots for several more months.

Also read: Car market February 2022: electric and alternative fuels rising