France In July 2010 : Sacre Bleu!

Yesterday, I wrote about how GM had beaten the French and made them concede benefits in return for job security. Well, it seems that the French got their own back on GM in a round about sort of way. Bloomberg reports that Opel sales in France dropped a massive 30 percent to 6,462 units in July. This doesn’t bode well for Nick Reilly, head of GM’s European division, as he tries to make Opel attractive enough for the corporate mothership to finance a turnaround with American taxpayers’ money. Shall we take a closer look at the French sales figures…?

In second place (in terms of sales dropped), it’s that company who’s always “moving forward” and can’t stop no matter how hard you hit the brake, Toyota. They dropped 27 percent to 5,192 units.

On the whole it was a pretty poor month for France’s car market. Sales dropped 13 percent for July 2010; from 194,855 in July 2009 to 169,804 last month. The reason behind this was because the French government is withdrawing scrappage incentives slowly. By withdrawing them slowly, it gives car makers in the French market a slow decline as opposed to a sharp drop. Francois Roudier, spokesperson for the CCFA, France’s car makers’ association, said “The decline accelerated, but we’re seeing a soft landing compared to countries that cancelled their incentives.” For example, Germany completely withdrew its €2,500 scrappage bonus, whereas France just cut its €700 incentive to €500 in July. Cold turkey in Germany, Methadone in France.

Other car makers which had a bad month are PSA Peugeot-Citroen, who dropped 15 percent to 55,413 units and Renault who fell 7.6 percent to 42,761 units. However, there was one bright spot. Volkswagen branded sales rose 12 percent with sales of the Polo leading the charge. But did you notice something? I said “Volkswagen BRANDED sales”. Volkswagen, as a whole, dropped 0.7 percent to 20,842 units. The question I bet you’re asking is” When’s the next Booth Babe article? This is crap! What could have caused Volkswagen to drop 0.7 percent after Volkswagen branded vehicle rose 12 percent?” The answer comes in one word. Seat.

Seat sales dropped 31 percent, which dragged Volkswagen’s figure into minus territory. Now considering Seat is the only Volkswagen brand not in the rising dragon market that is China and now couple this “stellar” performance, is it time to put Seat to bed? Actually, we’ll leave that question for another post.