France’s automotive supplier body has slammed European governments, who it says, have “artificially doped” markets through the imposition of scrappage schemes and generous provision of aid.
The Fédération des Industries des Equipements pour Véhicules [FIEV], president, Claude Cham, made his biting comments at last week’s Paris motor show, where he outlined the “serious” nature of the French and European financial crisis that is seeing economic headwinds batter the Continent with resulting huge rises in unemployment.
The number of French people out of work broke through the psychological 3m barrier last week, prompting a live appearance on television by Prime Minister, Jean-Marc Ayrault, who announced tax increases in a bid to slash EUR20bn (US$26bn) from the ballooning public debt.
“It is without question from my point of view, we have artificially doped the European market with scrappage schemes,” said Cham. “But this has continued to a certain degree by a certain amount of aid the automakers have had.
“Because we have doped for this year, we notice the tendance is going down, this has affected us. Faced with [this] we are in a situation of over-capacity – it is without question France will have to fight for its place.
“In order to do that, it is undeniable we will have to have a certain amount of reconstruction. But it is not the only measure we have – our vehicles on our territory [France] must have enough differences to be able to be sold.”
Cham added as president of the French suppliers association, he would strive to keep that differentiation, such as quality, to the fore, despite the alarming drop in orders from his members’ factories.
“We are in a situation that is serious,” he said. “French factories have seen a significant drop, down 11%. How can French suppliers look at this?
“We have a Europe that is looking at difficulties, [a Europe] which is looking at a significant drop in markets, for example, Spain and southern France. It is the most advanced countries that are slowing down the most.”
Cham estimates the French market this year will see around 2m passenger vehicles produced, leading to overall supplier turnover in the country falling by 11%.
To add flesh to the bones, Cham noted for the first six months of this year, light vehicle production in France fell by 8.8% to 1.1m models, a drop that represented 110,000 fewer cars being manufactured compared to the same period last year.
French suppliers sold EUR8.7bn of goods up to the end of June this year, down 11.1% compared to the first six months of 2011.
“It is not a secret – we have an environmental and economic policy in a relatively unstable position,” said Cham. “France remains unfortunately weak [while] a Eurozone to return to strong growth is not possible in the short term. We [France] will not escape without a certain amount of restructuring.
“We have the capacity to come back. We have to take the realities in an economic world that is changing. I am convinced the French automotive industry and the French suppliers are able to come back because we see companies such as Valeo, Faurecia [and] Plastic Omnium [for example] sell around the whole world.”