Renault Predicts Tough End to 2008 for French Market

PARIS – Renault SA expects car sales in France to fall dramatically in the last two months of the year, predicting a drop ranging from 12% to 22%.

Through October, the French market remained up 2.2% on year-ago, although sales fell 7.4% in the month. But dealer orders have been down 10%-12% per month since summer, says Guillaume Josselin, in charge of sales in France for Renault.

He expects the French market to end the year, at best, even with 2007, with a drop of 2% possible. That would translate into a sales shortfall of 314,000-352,000 units over the final two months.

December is likely to be particularly bad, because a year ago, people bought big cars and SUVs in December, ahead of the bonus-malus tax scheme that taxed them heavily beginning in January.

Sales are falling all over Europe, but only France among the five largest markets was still running ahead of 2007 at the end of October, thanks mainly to the bonus-malus scheme that used the taxes on gas hogs to give bonuses to people buying fuel-efficient models. Germany now is considering such a program.

The credit market is not a particular problem for the 75% of individuals who finance vehicle purchases in France, because the banks that make car loans are all still offering them, Josselin says. But Renault dealers have been warned to avoid overstocking, he says.

It is harder for small- and medium-sized businesses to acquire credit for fleet purchases, he says, but Renault has not changed any of its own credit rules as a result of the global economic gloom.