The Truth About Cars » France The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Jul 2014 12:00:21 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » France PSA To Cut Labor Costs By Moving More Production Out Of France Fri, 23 May 2014 10:00:55 +0000 Citroen_C3_Exclusive

PSA will consolidate their small car production at a factory in Slovakia, as the struggling auto maker looks to cut labor costs and increase margins on small cars.

Reuters and Automotive News Europe report that the next-generation Citroen C3, the brand’s best-selling model, will be built in Slovakia, alongside the C3 Picasso minivan and the Peugeot 208.

Although the 208 and C3 are currently built at PSA’s Poissy plant as well as in Slovakia, moving them eastward would allow PSA to slash their hourly wage costs, from 57 euros an hour in France, down to 15.50 euros in Slovakia. Lowering labor costs is critical for PSA, as it struggles to regain profitability and reap greater margins on their small cars, which are both unprofitable and PSA’s most popular cars.

Closing any French plant will be fraught with difficulty. Complex labor laws and cultural factors will make closing a plant a political nightmare for PSA – but the economics of Europe’s car market can no longer sustain it.

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European-Backed UN Amendment Brings Autonomous Vehicle Future Closer Tue, 20 May 2014 11:00:13 +0000 Mercedes-Benz S500 Autonomous Limo

While autonomous vehicles are still in the early stages of testing, a few of the European members of the United Nations have laid the groundwork for the self-driven future to come sooner than later.

Reuters reports the U.N. Working Party on Traffic Safety received last month an amendment to Article 8 of the 1968 Vienna Convention on Road Traffic backed by Germany, France, Italy, Belgium and Austria that would allow drivers of autonomous vehicles to take their hands off the wheel so long as as the vehicle’s system “can be overridden or switched off by the driver” at any time.

Should the amendment pass through the myriad of red tape within the organizing body, 72 countries — the United States, China and Japan withstanding — would have to work the new legislation into their law books.

The European-backed amendment now means automakers like Mercedes-Benz and BMW can move beyond testing their autonomous and semi-autonomous offerings toward delivery to showrooms throughout the continent, all without waiting for Google and other U.S. interests to bring the technology to market. Mercedes in particular delivered an S-Class limo in response to the search engine giant’s own efforts last August which drove the Bertha Benz route between Mannheim and Pforzheim, Germany without driver input.

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French Court Overturns Sales Ban Of Daimler Vehicles Using R134a Tue, 06 May 2014 12:00:17 +0000 aclass

France’s Conseil d’Etat announced Monday that it has overturned the government’s ban of a handful of Mercedes-Benz vehicles over parent company Daimler’s refusal to cease usage of R134a coolant currently under phase-out by the European Union.

Reuters reports the ban — issued by France’s ecology minister Ségolène Royal — was overturned after the court found her order unjustified, stating the vehicles affected did not show “a serious threat to the environment.”

Though vehicles sold in the EU were mandated to use R1234yf beginning in 2013, Daimler cited potential, unacceptable safety issues with the new coolant. Instead, the automaker continued to use R134a in its A-Class, B-Class, CLA and SL models, which were the vehicles banned from being sold in France. Daimler plans to replace the outgoing coolant with CO2 systems by 2017.

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PSA Peugeot Citroen, Dongfeng, France Reach Outline Deal Thu, 13 Feb 2014 16:30:36 +0000 dongfeng-peugeot-citroen

PSA Peugeot Citroen, Dongfeng and the French government have reached an outline deal to raise $5.5 billion in capital through a planned share sale in a last-ditch effort by PSA to remain alive after General Motors walked out of a similar deal over the Iranian market last year.

Reuters reports the deal will be presented to the Peugeot board February 18, at which point the board will sign a non-binding memorandum of understanding that same day according to sources closest to the matter. The plan would allow Dongfeng and the French government to each own 14 percent of PSA, while the two automakers retain and expand upon their alliance toward their goal of penetrating further into the Southeast Asia market.

With most of the plan settled, the only item needed to pull everything together is an independent chairman who will oversee the plan’s implementation. The French government wants senior civil servant Louis Gallois, brought aboard under the existing agreement between the state and PSA since 2012, as their champion, while Dongfeng is pushing for French businesswoman and independent Peugeot director Patricia Barbiezt to fulfill the role.

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Europe Finally Turning Around? German Registrations Up 7%, Sales Also Rise in France, Spain, Italy Wed, 05 Feb 2014 11:00:14 +0000 western-european-car-sales-million-units-_chartbuilder

The European automobile market may be pulling out of its six year sales slump, according to Automotive News, with  new car registrations in Germany up 7% in January from last year, joined by France, Italy and Spain reporting year to year increases for the month. German new car sales  for the month were 206,000, the third monthly gain out of the past four months and the best monthly percentage improvement since September 2011. Analysts caution, though, that the growth in the German market was in part due to discounting.

However, industry executives and analysts warned that underlying demand may not be robust as Germany’s growth was in part attributable to generous price discounts. Ernst-Robert Nouvertne, who operates two Volkswagen stores near Cologne, said “Incentives are the name of the game. Headline sales are looking good but profit per car is crumbling. The (German) market is still pretty strained.”

For their part, the VDA trade association said that sales could have been even better but January 2014 had one less sales day than the same month in 2013. “It’s pleasant to see that the stabilization of the German market is continuing at the start of 2014 but we should remain only cautiously optimistic,” Matthias Wissmann, VDA president said. Wissmann noted that January’s increase was boosted by relatively poor sales last year. The VDA said that it expects new car registrations in Germany to rise to about 3 million vehicles this year from 2.95 million in 2013.

French new car sales were up slightly, 0.5% to 125,477 in January. The CCFA industry association forecast stable or slightly higher car sales in France this year.

Sales of new cars and light trucks in Italy were up 3% to 117,802, according to the government’s transport ministry. Industry groups, however, urged caution, attributing part of the increase to pent up demand as car owners finally replace older vehicles after putting off new car purchases while the financial crisis was ongoing. Automotive research group Centro Studi Promotor said in a statement, “In absolute terms, sales of passenger cars [in Italy] remain at levels last seen in the late 1970s.”

Sales of new cars were also up in Spain, +7.6% last month to 53,436 vehicles. Auto manufacturers’ association Anfac said that sales were improved by government subsidies to encourage scrapping old cars.

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Audi Invests In Synthetic Gasoline From Sugar Sat, 01 Feb 2014 08:33:57 +0000 Audis at an Oil Pump

Audi’s bio-fuel initiative is expanding into France through an investment by the automaker to Global Bioenergies, whose bio-isooctane could be the replacement for petroleum gasoline when the time comes to make the switch.

The bio-fuel is made from fermented sugar through genetic modification of E. coli bacteria to produce isobutane gas without poisoning the yeast utilized in the fermentation, an issue currently experienced in ethanol production. The longer-lasting process works with feedstocks like corn and sugarcane as well as straight sugar, and can also be adapted to use biomass such as high-glucose wood chips.

At the pump, bio-isooctane can go directly into a vehicle without modification to the engine and fuel-delivery system, or can be blended with petrogasoline in the same manner as E15 and E85. The biogasoline may also come with a lower price per gallon or litres, as the fuel can be produced much quicker and cheaper than ethanol and other bio-fuels.

For the moment, Global Bioenergies is building two working proof-of-concept production plants in Germany and France, whose total annual output is expected to be 100,000 litres. Audi’s investment will be used to help in the rollout of the new fuel as part of the automaker’s branded e-fuel strategy, with bio-isooctane completing the triad with Audi’s investments in ethanol and biodiesel for their complete lineup of vehicles.

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Britain Expected to Build More Cars Than France for the First Time Since 1966 Tue, 21 Jan 2014 10:00:25 +0000

Click here to view the embedded video.

For the first time since 1966, the United Kingdom’s automobile industry will likely build more cars than those built in France. Increasing domestic and export sales are expected to make 2013 a record year for car manufacturing, putting Great Britain in third place among car producing countries in Europe, behind Germany and Spain. UK car production is estimated to reach 1.55 million units, up from 1.47 million the previous year and 1.35 million in 2011. In contrast, French car production for 2013 is expected to fall to ~1.54 million units, down from 1.66 million in 2012 and 1.88 million the year before that. Some analysts and industry executives predict UK car production to hit 2 million by 2017 as investments to plants bear fruit.

The growth in manufacturing was attributed to the strength of traditional British brands (albeit foreign owned) such as Jaguar, Land Rover, Mini, Vauxhall, Rolls-Royce and Bentley, as well as strong production at Japanese automakers like Nissan, Toyota and Honda that have set up assembly operations in the UK.

Click here to view the embedded video.


Some have attributed both the survival of those British brands and the growth of transplant assembly facilities to late Prime Minister Margaret Thatcher, whose government both courted Japanese automakers and provided £2.9 billion of taxpayer money in subsidies to British Leyland from 1979 to 1988, allowing iconic British brands to survive long enough to be bought up by the Germans.

Click here to view the embedded video.

At the same time the drop in the production of French cars is attributed with overcapacity, a stagnant European car market in general and in particular the soft domestic French market on which French manufacturers are highly dependant, a lack of business confidence in the current government and currency issues regarding the Euro.

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PSA Hires Ex-Renault COO Tavares As Next CEO Tue, 26 Nov 2013 16:45:37 +0000 450x222xjpg-3-450x222.jpg.pagespeed.ic.8kqTWHzuOU

PSA confirmed that former Renault COO Carlos Tavares will take over the reins starting January 1st. Tavares assumes the role at a fortunate point in time for PSA: an alliance with Chinese car maker Dongfeng is underway, and Tavares’ predecessor, Philippe Varin, has already completed the difficult task of closing factories and cutting thousands of jobs, a difficult task in a country like France.

Now, Tavares will be tasked with helping PSA turn things around, with a slate of new product, a leaner organization and  reorganized brand structure. Despite Varin laying much of the groundwork for a potentially revitalized PSA, Tavares could end up in the right place at the right time – able to fulfill his dream of running a car company, while presiding over a successful turnaround.

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Iran’s Imported Chevrolet Camaros Raise Questions About GM’s Dealings With PSA And The Iranian Regime Thu, 07 Nov 2013 14:26:41 +0000 IRAN-_USA_obama-rouhani_CALL

An obscure story in the Azerbaijani press this past summer may be the tip of a much larger iceberg involving General Motors, PSA Peugeot Citroen and the Western World’s current bete noir: the Iranian regime currently embroiled at the heart of a controversial nuclear program, which is subject to economic sanctions by the United States government, including those that specifically target Iran’s automotive industry.

Citing reports from Iran’s Mehr news agency, an Azerbaijani news outlet reported that an unspecified number of brand new Chevrolet Camaro RS 2LT convertibles were imported by a division of Iranian conglomerate Iran Khodro. According to the report, the Camaros were sent from Miami to Paris, and then from Paris to Tehran via a Qatar Airways plane. The report also states that US Customs and Border Patrol documents list the final destination as the Aras Free Trade and Industrial Zone.

Iran Khodro, which manufactures automobiles in Iran, is among the Iranian industrial entities that has been hit hard by American sanctions against Iran, including those that specifically target its auto industry, which some parties allege is a “major procurement network that imports material and technologies used to build uranium centrifuges instead of cars.

Given the serious penalties for violating sanctions against Iran, it seems unthinkable at first glance that General Motors vehicles would be exported to Iran for sale without any consequences. GM even stipulated that PSA suspend doing business with Iran and IKCO as part of its alliance agreement with PSA, an agreement that seems to have stalled at this point. But a deeper dive into the matter reveals a much more complex picture, one that sheds more light on GM’s future positioning in emerging markets, its dealings with Iran itself, and what may be the true nature of its alliance with PSA.

The ties between PSA and IKCO have historically been very strong. Most of IKCO’s cars were Peugeot vehicles of varying ages, branded as Iran Khodro or Peugeot vehicles, and built in Iranian factories. In a market of 1.12 million units annually, IKCO had production capacity for a million units per year, with IKCO and PSA’s joint venture ruling the vast majority of those sales, while their factories ran very close to capacity in previous years. PSA alone accounted for roughly 458,000 units sold in Iran, while PSA rival Renault also had a strong interest in Iran, selling 100,000 units per year, until it withdrew from the country, citing fears of violating U.S sanctions as a reason for walking away from the Iranian market.

Now, various French news outlets, including Le Figaro, a respected daily newspaper, are accusing General Motors of intentionally gutting PSA’s ability to do business in Iran, while attempting to establish its own partnership with IKCO, as a means of securing a strong footing in the up and coming Iranian market, one that Boston Consulting Group estimates is good for 1.5 million units per year by 2020, making it one of the strongest of the “Beyond BRIC” countries.

Le Figario states that

Iranian automotive industry is particularly courted by General Motors . The giant came into contact with Iran Khodro, which worked until 2012 with Peugeot to produce 206 and 405 models that the French group has stopped delivering to Iran because of Western sanctions imposed on Tehran for its nuclear ambitions . “For at least six months as emissaries of General Motors go to Iran, they are no longer the simple identification of the market,” warns the industry, “but rather to the draft contract resumption of GM “, which was firmly established in the time of the Shah.

Le Figaro alleges that GM is not the only company to be looking to Iran if and when relations between America and Iran thaw amid a resolution over its nuclear crisis, but it does call out an ad campaign on behalf of GM undertaken by an Iranian law firm – other reports also point to a social media campaign designed to target Iranian consumers on behalf of GM. Other allegations leveled at GM include the use of emissaries on behalf of GM visiting Iran and IKCO as part of a broader push to undermine established French business interests in favor of American companies in preparation for the resumption of commercial dealings with Iran. One source cited by Le Figaro doesn’t think that this was a mere coincidence. The source claims that Executive Order 13645 is

“…a real cleansing of the Iranian car market as it prepares to make way for U.S. manufacturers before a political deal between Tehran and Washington.”

Upon closer examination, sale of the Camaros appears to be allowed under a loophole in Executive Order 13645 , which punishes any foreign entity that sells or supplies parts or services to Iran’s automotive industry (specifically its manufacturing sector) but does not prohibit supplying Iran with assembled vehicles.

During the initial stages of the tie-up, the alliance between GM and PSA was difficult to discern. Beyond vague platform sharing and purchasing agreements, there seemed to be few synergies that made such an alliance worthwhile. By the Iranian angle adds context to the entire affair.

By putting pressure on PSA to end its relationship with IKCO, GM gave America a way to keep the heat on Iran’s economy while also cutting off an artery for hard currency via reduced vehicle exports. At the same time, it was able to cripple an already ailing partner by cutting it off from one of its better export markets, and a growing one at that. Before the alliance had even been former, our own global sales reports showed that sanctions and other economic factors had been effective at gutting Iran’s automotive market, composed largely of locally built IKCO/PSA products. The departure of Renault was another positive development for GM, with the French auto maker walking away from 100,000 units annually. Altogether, the absence of the two French players leaves a 585,000 unit hole in Iran’s nearly 1 million strong auto market, one that GM is primed to capitalize on if and when things get less frosty and trade relations between the two countries open up .

Many observers feel that Iran’s Islamic regime is living on borrowed time, thanks to a relatively young population that is plugged into Western popular culture – these same people came very close to toppling the regime just a few years ago. And while regime change doesn’t seem to be in the cards anymore, then the very sanctions designed to bring the regime to its knees might at least foment some sort of normalization of relations in exchange for the forfeiture of Iran’s nuclear program, along with a new, more moderate ruler (though Iran’s unelected religious leaders still hold all the power). Such vast numbers of young people with rising economic prospects and families of their own on the horizon will be perfect consumers for a large number of automobiles in the future, and who better to serve them than General Motors?

The timing is likely to be fortuitous, as Iran’s auto market is expected to grow by another 500,000 units, to roughly 1.5 million units by the end of the decade. GM’s push won’t be centered around Camaros either. The General has a number of Chinese brands selling cheap, compact vehicles that can go head to head with Chinese brands like Great Wall that are already established in Iran. If GM really does make a big push into Iran, brands like Wuling and Baojun will be just as important as Chevrolet and Buick, and will likely be part of an attempt to capture a substantial amount of volume by utilizing multiple brands in GM’s portfolio to help capture various market segments from compact low-cost cars to flashier fare to the smaller commercial vehicles that brands like Wuling are known for.

Platform sharing, the oft reported cause of death of the GM-PSA alliance, may have been a red herring all along. GM could possibly have decided to abandon the alliance, or any pretense of it, after getting what they came for: in this case, an express pass to a promising emerging market that isn’t a BRIC country. But don’t count PSA out just yet. Recent talks with Chinese auto maker Dongfeng could allow it to get back in the game in Iran, free of any concerns about violating U.S. sanctions.

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French July Sales Slightly Up, Glimmer of Hope? Fri, 02 Aug 2013 10:30:40 +0000 8f41f81f80ceba2ffd4297068b8a65039c04cb0622294d61c4290f982a3dc541

A glimmer of hope that the European car market is stabilizing might be seen in the fact that for the first time in nearly two years, French car sales were up in July.


Car registrations were up 0.9% to 150,248 for the month, with French brands Renault and the financially troubled PSA/Peugeot-Citroen group up. Recent model launches and dealer discounts are attributed for the gains. Overall sales, though, still reflect the soft European market. Toyota was up 24%, and while Renault, Peugeot, Fiat, Hyundai and BMW also posted gains, VW Group, Opel, Ford, and Kia were down from last year.

For domestic French brands, Peugeot was up 4.6%, Citroen was down 3.2% and Renault, helped by its new Captur subcompact SUV and a 6.1% increase of the low-cost Dacia brand, was up 4.7% overall, +4.2% on Renault branded cars. Mercedes-Benz was down in the wake of its continuing dispute with French authorities over Mercedes-Benz’s refusal to use R1234yf refrigerant. Audi sales were unchanged.

CCFA sales report (PDF, French) here.


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French Government Ignored Court Ruling, Invokes EU “Safeguard Procedure” to Reinstitute Ban On Mercedes-Benz Cars W/ R134a Refrigerant Tue, 30 Jul 2013 14:00:12 +0000 C_service-500x333

The regulatory and verbal war between France and Germany over Mercedes-Benz’s refusal to switch to the R1234yf air conditioning refrigerant has escalated. After a French court ordered a 10 day stay, lifting that country’s ban on R134a equpped A Class, B Class, CLA and SL cars made since June, Daimler expressed confidence that the French government would abide by that ruling. That confidence was apparently badly placed because the French government has now invoked a “safeguard procedure” of the EU that allows member countries to act unilaterally to avoid a serious risk involving the environment, public health or traffic safety, reinstituing the ban. Daimler promised that it would continue fighting to allow the sale of those cars in France. It claims that the new refrigerant is dangerously flammable and toxic.

The French environment ministry said, “The registration of Daimler/Mercedes vehicles classes A, B, CLA and SL remain banned in France as long as the company does not conform to active European regulation.” Daimler responded by calling the decision “absolutely inexplicable” and promised more litigation. Eu officials said the were talking with both the French and German national governments to schedule bilateral talks in September in an attempt to resolve the dispute.

While French officials frame the matter as an environmental issue, Mercedes-Benz supporters think that national politics and favoring local automakers is a factor. PSA Peugeot Citroën have asked for government financing and Renault has struggled as the European market has had its worst year in decades, particularly with small and medium sized cars. German companies, BMW, Daimler and the VW group, which all make larger, more expensive cars, have been doing better, particularly in emerging global markets. German chancellor, Angela Merkel, angered the French last month when she blocked EU efforts to institute more stringent controls on emissions from large cars.

The head of the Association of Mercedes-Benz dealers in France, Jean-Claude Bernard, said the action was intended “to please the greens and damage a German manufacturer. This coolant is used in 95 per cent of cars in France with air conditioning. If it is so dangerous they should take them all off the road.” Bernard’s group says that about 5,000 deliveries have been affected so far, that orders were down 20% and that the Mercedes models involved represented about half of his association members’ sales, about 30,000 units annually. He demanded an end to the R134a ban and wrote to the French minister for the environment claiming that 11,000 jobs in France were endangered by the ban.

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French Court Backs Mercedes-Benz in R1234yf/R134a Dispute with EU Fri, 26 Jul 2013 12:00:54 +0000 10860649_11507314_HyiBQTR_551x413

After a French court lifted that country’s ban on Mercedes-Benz cars equipped with R134a air conditioning refrigerant, saying that the French ministry for the environment must reevaluate their decision to block those cars, Daimler said that it was “very confident’ that the French government will abide by that court ruling. R134a has been banned for use in new model cars by the EU since the start of 2013.

According to the summary ruling, the ministry has 10 days to decide if it’s going to try to continue the ban on Mercedes A-class, B-class and SL cars built after June 12, which Daimler has equipped with R134a, now banned by the EU because it is considered a powerful greenhouse gas. The ruling does not force French authorities to allow registrations of those cars during that 10 day period.

A Daimler spokesman said: “We welcome the positive decision of the French court, which clearly rejected the French registration authority (decision) to prevent the registration of our cars.”

If the ban is upheld, it would affect about 29,000 cars annually, about 2% of Mercedes-Benz’s worldwide sales.

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PSA’s Financing Unit Set To Win EU Approval For State Aid By Next Week Thu, 25 Jul 2013 12:30:24 +0000 PSA Peugeot

A $9.25 billion (€7B) loan guarantee from the French national government for the Banque PSA Finance arm of PSA/Peugeot-Citroen, Europe’s second largest car company, will likely gain approval from European Union regulators next week, according to sources cited by Reuters and Bloomberg.

The guarantee is aimed at ensuring the carmaker’s viability by allowing it to offer competitive financing rates to car buyers. The EU Commission is still in talks with PSA over their restructuring plan which would cut 11,200 jobs and close the Citroen plant at Aulnay, outside of Paris.

Peugeot’s automotive unit burned through 3 billion euros ($3.96B)  in cash last year. Bloomberg reports that the French automaker is in discussions with banks on how to put its financial house in order, with options including selling off a stake in Banque PSA Finance or other assets to increase its capital.

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French Authorities Sell Off Ultra Luxury Cars Seized From Son of Dictator Wed, 17 Jul 2013 16:25:03 +0000

Click here to view the embedded video.

While Equitorial Guinea is one of the wealthiest countries in Africa,  only half of the people have access to clean, safe drinking water. One fifth of children born in the country die before they are five years old. Two years ago the French government raided the €80 million, 101-room mansion near the Champs Elysees belonging to Teodorin Obiang, the son of the president of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, in power since 1979. Among the treasures found in the mansion were a cache of supercars, which have now been sold off.

The raid was part of a “bien mals aquis” investigation into ill-gotten gains. According to French authorities, those ill-gotten gains were funds belonging to the African country looted by the Obiang family. Though Obiang is claiming diplomatic immunity due to having been named Second Vice President of Equatorial Guinea, a recent ruling in French courts said that such immunity did not protect property bought with stolen public money. As a result of that ruling, French authorities have gone through with the seizure of vintage wines, antique furniture, fine art including a Degas and a Renoir, and jewelry from the mansion as well as Teodorin Obiang’s impressive collection of low mileage high dollar cars. Those cars have now been sold off by the Drouot auction house in Paris, fetching over $4 million (€3.1 million, £2.7 million), and included two Bugattis, two Bentleys, a Rolls-Royce, a Ferrari, a Porsche, a Maserati and a Maybach.

Court documents show that 4 years ago, Obiang imported 26 high end luxury cars worth $12 million to France from the United States. The fleet was comprised of one each from Aston Martin, Porsche, Lamborghini and Maserati, plus two Bugattis, four Mercedes-Benzes, four Rolls-Royces, five Bentleys, and seven Ferraris. Despite the fact that the roads in Equatorial Guinea are generally not paved and require serious 4X4 vehicles, many of those cars were shipped to Africa for his use there. The cars that were auctioned were the ones left in his Paris pied a terre.

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Junkyard Find: 1989 Peugeot 405 S Sat, 13 Jul 2013 13:00:15 +0000 11 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee MartinPeugeot gave up on the North American market after the 1991 model year, thanks to poor sales of their new 405. I haven’t seen one of these cars on the street for at least 15 years, and junkyard sightings have been correspondingly rare. When I spotted this car at a Northern California self-serve yard a couple months back, it took me a moment to figure out what it was.
03 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee MartinNearly 200,000 miles on the clock, which is comparable to what I see on (non-Mitsubishi) Japanese cars of the same era.
02 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee MartinWhen the company that built your car retreats from your continent, keeping it on the street becomes quite a challenge. This one made it to age 24.
10 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee MartinThe only Peugeot I’ve ever owned was a 504 that came with a bunch of Linda Ronstadt 8-tracks. I liked that car, in spite of its frequent breakdowns (yes, I know, the 504 is supposedly bulletproof everywhere else in the world).

We have a few Peugeot 405 Mi16s racing in the 24 Hours of LeMons (they’re quite affordable, i.e. less than scrap value in most cases). They’re somewhat quick, but they tend to be pretty blow-uppy. Here’s one depositing a connecting rod in the windshield of a following car.

01 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 02 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 03 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 04 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 05 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 06 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 07 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 08 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 09 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 10 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 11 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 12 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin 13 - 1989 Peugeot 405 Down On the Junkyard - Picture courtesy of Murilee Martin ]]> 62
PSA, GM Discussing A Return For Peugeot And Citroen Products In The USA Wed, 10 Jul 2013 13:50:10 +0000 Citroën_Jumpy_Kombi_front_20110109

No, the headline is not just empty click-bait. According to La TribuneGM and PSA are looking at bringing some current Peugeot and Citroen products to America. The only catch is that they’d be commercial vans.

The Citroen Jumpy and Peugeot Expert, the two vans in question, are currently built in a joint venture with Fiat due to expire in 2017. PSA is looking for a replacement solution, and with GM currently buying vans from Nissan (their NV vans are going to be sold as Chevrolets), it would be advantageous for GM to take advantage of their alliance with PSA and get something out of the deal.

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Renault About To Get Going In China Mon, 08 Jul 2013 12:32:14 +0000  

Renault China

Renault hopes to get going on its foray into China, and to sign a joint venture agreement with Dongfeng, Reuters says. “We are waiting for an official invitation from the Chinese industry ministry,” Reuters heard from an insider. Rumors of an impending JV kept Chinese media guessing and speculating for years.

Total investment is said to be close to 10 billion yuan ($1.6 billion). Renault and Dongfeng are well acquainted: Alliance partner Nissan has a joint venture with Dongfeng, and is China’s largest Japanese brand. The island issue put a damper on sales of Japanese-branded cars in China, which makes a diversification into European brands extra pertinent.

According to the report, the Renault-Dongfeng JV will start with an annual capacity of 150,000 units, and will begin producing SUVs and minivans in 2014.

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Killer Coolant Wars: France Blocks Mercedes Registrations Fri, 05 Jul 2013 17:05:01 +0000

The fight over the flammable refrigerant takes a new twist. France refused to register Mercedes A-Class, B-Class and SL cars assembled since June 12, even though German authorities have approved them, a Daimler spokesman told Reuters.

Under the EU Whole Vehicle Type Approval system, cars approved in one EU country are supposed to be automatically legal in all.

An EU official told the wire that France blocked the registration because the cars contained a coolant that was not permitted in the EU. Daimler refused to use the coolant 1234yf, saying that it could result in deadly fires. Often dubbed the “killer coolant,” 1234yf is the only air conditioning coolant on the market that conforms to a new European Union directive on greenhouse gases.

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PSA On The Death-Bed: Worth More Dead, Or Cut Up Into Parts? Fri, 05 Jul 2013 15:16:44 +0000 Death bed - Picture courtesy

Imagine (sorry) you are on your death-bed, surrounded by your friends and families, who are divided in two camps. One group bets big on how soon you will die. The other group calculates how much your body-parts will bring after you are cut up. Now you know how PSA poor Peugeot Citroen must feel.

According to Reuters, the battered PSA stock jumped 8 percent yesterday after Goldman Sachs said the company is worth more than the €6.7 a share, if one would “focus on a SOTP (sum of the parts) valuation.” Usually, the whole is supposed more than the sum of the parts, but in the perverted world of financial double-speak, SOTP valuation means the parts could be worth more than the sum. That seems to be the case here. The market is betting that Peugeot is being broken up and sold by the piece.

Until yesterday, the market was betting big that PSA would croak.  Says Reuters: “Hedge funds have been betting on falls in Peugeot’s shares, making it one of the biggest short-selling targets in Europe in the past year. According to data from Markit, 10.2 percent of Peugeot shares outstanding are out on loan.”

So what would you be saying if you overhear the discussions of the two camps by your sickbed? I know what I would say: “Nurse, crank up the Morphine.”

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Peugeot Family Willing To Relinquish Control Of PSA To GM Thu, 27 Jun 2013 15:35:11 +0000 peugeot1

Mired in the same overcapacity crisis as the rest of Europe’s auto makers, the founding family of PSA is reportedly willing to give up control of the company that owns Peugeot and Citroen in exchange for a fresh infusion of capital from GM, which currently owns 7 percent of PSA.

Terms of the deal are unclear, but PSA is sustaining heavy losses as European car sales have tanked. Unlike arch rival Renault, PSA has no low cost cars to help attract emerging market consumers and value-oriented buyers in Europe.

The Peugeot family still holds a 25 percent stake in the company and retains roughly 38 percent of the voting rights. But the family is reportedly comfortable with the idea of giving up control, according to a Reuters source

“GM faces the same overcapacity situation with Opel, and that’s why PSA is trying to convince them to merge the two,” said one of the people, who asked not to be identified because the talks are confidential. “The Peugeot family has now accepted that they’ll lose control, so this is no longer an issue.”

The news outlet reports that nothing concrete would happen until after September’s German elections. Any deal with Peugeot would undoubtedly result in major job losses and factory closures in France, Germany or another European country, which makes any tie-up extremely politically sensitive. But given the prospect of GM absorbing yet another ailing European brand, deep cuts will be an inevitable part of the consolidation of PSA.

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Fiat Shows How To Look Good In France: Buy Your Own Cars! Fri, 21 Jun 2013 19:05:19 +0000 Fiat in St. Tropez - Picture  courtesy

As we all know, the European car market is in bad shape. France, one of Europe’s volume markets, is especially hard hit. The month of May was no exception.  The French market was down 10.3 percent. Red ink and nose blood was running just about everywhere. Everywhere except Fiat. Fiat, the Italian patient, looks amazingly alive in France. Their passenger vehicle sales were up a whopping 12.3 percent in May and 6 percent for the first five months. In a market that tanks, just staying afloat would be a big deal. Double digit is huge. It was, until the scrappy auto site started digging. They found that the growth was made by dealers buying their own cars.

Says 7pm-auto in its daily bulletin (“Every day at 7pm – 20 minutes to read”):

“Since January 2013, the Italian car maker has lost 22% of registrations to individuals. But at the same time, self-registrations in the dealer channel increased by 26.4%. You want more? Fleet sales to companies and government : +31%. Short-term rental sales +48.3%. “

Looks like someone is desperate to make sales, non?

We called  7pm-auto  Editor-in-Chief Ali Hammami in Paris, to discuss the fact, as often written at TTAC, that short-term self-registrations  by dealers are a common phenomenon in Europe. Cars are reported as sold, they earn a hefty bonus for “making the numbers,” the manufacturer looks the other way, because a sale is a sale, right? So we ask Ali what the average self registration number was in France for the first five months.

“2.1 percent,” says Hammami.

And for Fiat in the same period?

“22 percent,” he answers.

Someone is really trying to look good ….

Pugnacious 7pm-auto already attracted attention of Reuters and other media. Keep your eyes on them – if you speak French, that is.

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Great News Everyone! Dacia Booming In Dismal European Auto Market Fri, 21 Jun 2013 14:17:08 +0000 Dacia_Logan_II_(front_quarter)

Europe’s car market may still be in the dumps, but our favorite maker of plucky Romanian low-cost transportation is doing just fine, thank you very much.

French business paper La Tribune reports that Dacia is having a strong 2013, with registrations up 17.7 percent in the first 5 months of the year. In Western Europe alone, that number is said to be 21 percent.

The success of Renault’s low-cost brand is a lone bright spot in a rapidly eroding new car market. But Renault also has to contend with falling sales of the Renault brand itself: in France, sales of the “diamond brand” (as its known) plunged nearly 15 percent through May of this year, while Dacia was up 18 percent.

The fear that Dacia is cannibalizing Renault sales seems to be coming true, even in Renault’s home market. Why buy a Scenic when the Duster exists (and is arguably cooler in the eyes of European buyers, since its a crossover, not a minivan)? Why pay more for a Clio when a Sandero will do the same thing? Skoda buyers may be tempted to opt for the more premium VW badge when making their purchasing decision, but Renault has no such cachet.

But then, a little cannibalizing beats eating dust.

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GM Good News: No More Investments Into PSA Wed, 19 Jun 2013 13:32:15 +0000
We can’t help it that there is so much crummy news about GM, but here is something decidedly positive: GM  “has no plans to make additional investments in its French partner PSA Peugeot Citroen SA which is subject to the depressed European automobile market,” Dow Jones Newswire says via NASDAQ. The wire heard it from Dan Akerson himself, so it must be true.

A year ago, in an alliance of the walking wounded, GM bought 7 percent of  limping PSA. Since then, GM had to write down a good deal of that so-called investment.

PSA faces a European Union investigation triggered by the French government providing financial support for Peugeot’s financing arm.

The probe could derail a loan-guarantee package agreed to by France in October.

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New Statistics Predict New Doom For Opel – In France, At Least Tue, 18 Jun 2013 16:35:43 +0000

The sagging EU economy led to the worst car sales since 20 years (cause and effect could also be the other way round.)  With so much riding on car sales, France’s La Lettre Auto K7 found a way to predict them with greater certainty: They simply ask car dealers how many orders they received. Most volume brands in Europe are built-to-order, and even in the worst economic climate, that takes a minimum of 4 weeks until the car is ready to be registered. That’s when usual statistics recognize the sale.


Reuters has received an advance copy of the new prediction. May data see an overall 3 percent fall in passenger car orders at the surveyed dealers. That’s not too bad,  unless when your brand is Opel or Dacia.  Says Reuters:


“Opel, the European division of General Motors, experienced a 32 percent decline at surveyed dealerships in May, with orders for its Adam mini falling short of expectations.


Renault’s orders grew 15 percent, helped by the new Captur compact SUV, but its no-frills Dacia brand tumbled 24 percent. Orders for Peugeot cars fell 2 percent while sister brand Citroen dropped 7 percent.”


This shines the spotlight on how car sales are generally counted in Europe. They are counted when cars are registered, and the data are published by the registering government entities, not by automakers. That should make for the most dependable data, would there not be a nasty phenomenon, which TTAC has mentioned a few times in the past. Dealers “buy” the car themselves, register it for one day, then sell it as “used” at a high discount.


According to Jesse Snyder in Automotive News, they sell it “usually to dealers in other countries, who then resold them as new. If a car is shipped from Italy to Austria to Slovakia to the Czech Republic, how many times is it reported as a new-car sale?”


Whether the second “sale” goes in the new or in the used column, at the very least, this practice skews reported car sales. It makes them look better than they actually are – at least for a while. Last year, sales looked benign in Europe, and especially in Germany, for a while. One of the reasons behind it were the one day registrations. Last September in Germany, approximately 30 percent of the “sales” were phantom sales.


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Blamage! UK To Outproduce France Thu, 13 Jun 2013 17:42:07 +0000

The UK, infamous for having lost most of its former automaking glory, and supplier of the short-lived “American Leyland” moniker for GM (“Government Motors” stuck) is roaring back. The island nation is set “to overtake France as Europe’s second largest automotive producer within the next five years if UK car sales and exports maintain current strong growth,” Reuters says.

Imagine the embarrassment in Paris!

“All the indications appear to be saying yes Britain will be second in a few years,” Tim Abbott, managing director of German carmaker BMW’s UK operations told the wire service. “It will be about the demand for the cars made in the UK but that looks to be there judging by the recent performance of the likes of Jaguar Land Rover, Nissan and BMW.”

Last year 1.5 million cars were produced in Britain, compared to 1.9 million in France, according to ACEA data.. Volumes are slipping France, and is rising at Britain’s eight main car plants. Britain could hit 2 million by 2018. Europe’s biggest producer, Germany, made 5.5 million vehicles last year, about half of them exported.

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