Why PSA and Renault risk closing factories in the long term
Orders for new cars have collapsed since the dealerships closed. They are at 5% of usual levels. The factories are running. But there is a real risk of unemployment - partial unemployment at least. The government decides to extend the current bonuses and scrapping bonuses until June 30, 2021.
Officially, everything turns! “There is no partial unemployment in factories, no drop in production,” says Renault. Factories produce and orders are fulfilled. "The order book is high and stocks are low. We therefore continue to deliver by appointment," said a spokesperson for the diamond firm. But there you have it: if the repair-maintenance workshops remain open - with a 30% drop in activity, however - the commercial part of car dealerships is closed in France. The sale of cars is not considered an essential business, while, paradoxically, the two-wheeler dealerships remain operational! It is difficult in these conditions to choose a car model, let alone try it out ... and place an order. Certainly, "we can make an appointment with a seller," insists at Renault. It prevents.
Strong drop in order intake
“Order intake has fallen sharply,” notes a Renault dealer in the Paris region. "The level of orders for new new vehicles is ... 5% of its usual level," points out the CNPA (National Council of Automotive Professions) bluntly. Used car sales are also down 90%. The CNPA notes a 60% drop in calls from customers to concessions.
Manufacturers talk a lot about the use of digital. To configure a model, set your first choices, perfect. And potential customers are happy to use it. However, they are very reluctant to sign a delivery slip remotely. "This is extremely marginal," assures Vincent Salimon, chairman of the BMW France management board. The French auto market is therefore likely to be "beyond the 30% drop over the year 2020, or a decline of around 500,000 vehicles compared to 2019", underlines the CNPA. Or a floor level not seen for 50 years. With "complete uncertainty for 2021". Current scrapping premiums and bonuses for electrified vehicles will be extended until June 30, 2020, however the government said on Friday during a meeting with the industry.
First measures at PSA
"If it continues, we will be forced to stop the factories," says Franck Don, central delegate CFTC of PSA. For the moment, PSA has announced the postponement of the creation of a team Friday-Saturday-Sunday in Sochaux for the production of the Peugeot 3008 and 5008. It should have started in late November. All overtime has also been abandoned in Sochaux and Mulhouse. PSA management insists that the factories obviously also produce for other countries. However, the concessions remain open in Germany… But not across the Channel, for example!
The industrial tool therefore risks at least partial paralysis in the weeks to come. What Bercy absolutely wants to avoid. The French builders had suspended production for two months during the first containment in the spring. This second confinement is certainly less draconian than the first, at this stage, authorizing work in the factory. Both manufacturers and equipment suppliers have also adopted very strict health protocols, unknown in March. But "we are not going to produce to generate stock and fill the fleets of cars as in the spring. Never again", warns an unofficial source at PSA.