July Sales Keep French Auto Makers Stuck in Low Gear

PARIS – French consumers in July did not help their national auto makers get a good start on their plans to recover in Europe in the year’s second half.

Car and van sales were down 5.6% for the month despite two extra selling days. The shortfall was 14.6% on a daily sales basis.

Renault and Dacia deliveries fell 5.8% and PSA Peugeot Citroen was off 8.5%, losing share to foreigners. Dacia sales nearly doubled, but the Renault brand suffered a 17.9% drop.

Although the market decline was smaller than the year-to-date decline of 12.4%, analysts had expected the French market to pull even after the first quarter, which was being compared against the like-2011 quarter boosted by government incentives.

The losses eased up in the second quarter, but the third quarter begins in a new slump. As PSA CEO Philippe Varin remarks during his July financial press conference, the crisis in the eurozone was not anticipated when the year started.

The continuing slippage in the home market is particularly distressing for PSA and Renault, which announced their intentions to improve their performance in Europe in the second half. PSA targets a 13.1% market share in the second half after 12.9% in the first, and Renault hopes to grow its sales in the year’s last six months after falling behind in the first half.

Results in France likely will be duplicated elsewhere in Europe, where a general malaise is affecting the economies, particularly in countries that use the euro currency. Germany, the biggest market, is the only exception.

And German auto makers are compiling exceptional results in France, as well. Volkswagen, which announced healthy first-half profits last week, picked up a point of share here in July with a sales increase of 1.7%. Daimler was up 5.5% and BMW held even. Ford, General Motors and Fiat all lost sales and share, with respective declines of 13.3%, 19.8% and 13%.

Toyota gained more than a point of share in July, with deliveries rising 14.3%. The auto maker worked against last year’s product shortages caused by the Japan tsunami.

Hyundai Group saw sales jump 37.8%, causing particular distress within the French government, which blames a flawed free-trade agreement put in place by the European Union.

Overall, French consumers registered 179,500 cars and vans in July, bringing the annual total to 1,436,046.

August is a vacation month in France, with few sales in any case, but September will bring the Paris auto show and new hopes for the auto makers. Renault will introduce its new Clio and Zoe electric cars, and PSA will unveil a GTi version of the Peugeot 208 and a new Citroen DS variant.