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back to index backEUROtalk October,  2016


France's carmakers look to the future

While Europe's biggest carmaker dominates the headlines, France, host of the Paris Motor Show, is home to the continent's number two and three carmakers - who are in a race with each other and their German rival, VW.

The Paris Motor Show is ongoing, within the country that's home to Europe's number two and three carmakers - the PSA and Renault Group. But the emissions cheating scandal hanging over their biggest competitor, Volkswagen, hasn't made the French carmakers inch forward in the hearts of European car buyers.

Instead, the Dieselgate-inspired backlash against diesels put Renault firmly in the sights of the French environment ministry, which started a probe last year into emissions cheating. While some Renault cars were associated with higher emissions levels than allowable, no evidence has officially been found of defeat devices.

In a press conference on the fringes of the Paris Motor Show on Friday, Renault CEO Carlos Ghosn said his company was cooperating fully with authorities and dispelled notions that tighter emissions regulations starting 2020 would create even more incentives for manufacturers to cheat.

Renault pledges not to game emissions

"We have to obey the rules, and compete with others at the same time," said Ghosn. "Gaming is against the interest of the carmakers, we can see how much damage it causes to the brand."

And the inroads Renault has made in the electric vehicle market has helped it somewhat move away from the shadow cast by diesel's current unpopularity.

At the Paris Motor Show, it presented its ZOE with a new battery that extends range to about 300 kilometers (186 miles) in city driving situations. Renault also has advantageous tie-ups within the industry. The motor show included electric versions of Daimler's Smart cars, with Renault motors in them.

Ghosn said such partnerships will be key, as automakers have to adjust to quick shifts within the industry and keep down costs.

"No automaker can do everything alone," he said.

In terms of rolling out electric vehicles, PSA, which includes brands Peugeot and Citroen, lags behind Renault - although it has said it will launch a range of electric vehicles in Europe in the next five years.

While Renault may have the competitive edge for now, IHS Markit automotive analyst Ian Fletcher says the still new, but fast-changing market of electric vehicles could mean Renault might struggle to maintain that lead.

"Although it is dominant in this category in Europe, is it at the forefront of most customers minds when it comes to the technology? I would probably say not outside of France," Fletcher said. "Indeed, it remains a small but growing market where there is still everything to play for, and as the technology becomes increasingly widespread in manufacturers ranges there is every chance that it will be even more difficult to hold on to."

And emerging contenders at the Paris Motor Show, like Volkswagen's electric car concept, the ID, and the Opel Ampera-e could give Renault a run for their money.

Struggles in the present

But beyond the changing markets of the future, Fletcher said French carmakers have enough gaps to fill in the present.

Troubles in the Russian market, and AvtoVaz, Renault's biggest manufacturer in the country, has hit the French carmaker's business. And PSA has seen its products "fall out of favor" in the Chinese market, where it has significant operations.

But there's reason for France's carmakers to be positive too.

"Renault continues to be on the upswing with its ongoing product launch strategy yielding highly competitive vehicles," said Fletcher. "PSA is making stronger moves in categories where most of the interest is, but it had neglected them in the past."

Source: Deutsche Welle - GAI






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