French brands are neglecting segment E
 

Such as the general brands Ford, Opel and Fiat, French brands have abandoned  the production of cars from segment E in Europe. The last segment E car produced was the Citroën C6.


Premium German manufacturers such as Audi, BMW and Mercedes have indeed monopolized almost the entire segment.


On the graphs below, one can see that from one generation to the next,  French segment  E models have seen their influence drop and eventually disappear in 2012. 2012 is the year the Citroën C6 was last produced and marked the end of French manufacturing of segment E cars produced Europe.


As a result,  top of the range French brands are only represented today by D-segment cars(Renault Laguna, Renault Espace, Peugeot 508, Citroen C5) that in turn have lost much influence over the past ten years, for the same reasons.


Ford and Opel, are experiencing the same phenomenon (Ford Mondeo, Opel Insignia). Fiat is focusing on segments A and B (Fiat 500, Panda, Punto), abandoning D and C segments (Fiat Bravo).


Volkswagen does not market any vehicles from segment E but has a strong presence in segment D with the Passat and the CC, and has one vehicle in segment F, the Phaeton.


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Since 2009, which manufacturers benefit from the Chinese market?
 
The Chinese market has increased dramatically since the early 2000s, after decades of confidential sales. It is interesting to compare the evolution of the market share of the leading manufacturers in recent years, to see which ones are taking the head.

The first observation is market share decline of independent Chinese manufacturers between 2009 and 2013. They have lost 4 points against foreign competition (where local production is made with Chinese producers through JV).

Among foreign competition, the largest beneficiaries are the VW group that gained 4 points, the GM group that gained 2 points, the Ford group that gained 2 points and the Hyundai-Kia group that gained 1 point.

Other manufacturers have lost influence since 2009: GM-Wuling lost 1 point, Toyota has lost 1 point, Honda has lost 2 points. PSA and Renault-Nissan stayed stable since 2009, they have neither lost nor gained points.

It is not only the increase of SUV sales in China, that created this new market situation, it is simply the dynamics related to of each manufacturer a more or less attractive offer that makes the difference.

it is expected that further changes will occur in the coming years because the Chinese market has not yet stabilized its market share. Moreover, a possible intervention of Chinese authorities in favour of 100% Chinese manufacturers could change the situation.


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Why PSA keeps the Rennes plant?
 
In a previous analysis (new game of musical chairs in the PSA plant), we have examined the PSA decision to allocate the production of future MPV 5008 to Rennes plant and not Sochaux plant. The present anlysis relates  to the reasons of this transfer.

Despite the decline in production volume recorded in Rennes in recent years (350 000 units in 2005 and less than 100 000 in 2013), PSA plans to sustain activity in Rennes rather than close the plant, however located in an outlying region of France (and Europe), largely underutilized and with a decreasing activity .

PSA intends to use the Rennes  site as an assembly plant dedicated to segment D vehicles (Peugeot 508 and Citroën C5) . However the DS5 (5008 platform ) remains manufactured in the Sochaux plant.

This decision is difficult to understand by external analysts. Several PSA European plants are underutilized. Why keep a plant located in an  outlying region of Europe while other plants in central Europe are easier to use in terms of logistics?

The reason might be that that PSA management has in mind to load the Rennes plant after 2016, by models of segment D or E (example: the future Peugeot 608 ), or through the transfer of future Opel models. It has however not confirmed transfer models to Rennes plant.


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Jaguar-Land Rover are going to build a plant in Brazil
 

Jaguar - Land Rover (Tata Group) has signed an agreement with the governor of the Brazilian state of Rio de Janeiro to establish an assembly plant in Itatiaia (in the state of Rio).


Subject to final approval of the project by the Brazilian government, the construction site will begin in 2014 and the first vehicles will be launched in 2016.


The plant will initially have an annual production capacity of 24 000 vehicles . The vehicles produced there will be sold mainly in Brazil but also in South America. No export are currently scheduled for North America.


Jaguar-Land Rover has been present on the Brazilian market for over 20 years. It sold 9 549 vehicles there in the first ten months of 2013 (+40% compared to the previous year), in other words 1 000 vehicles per month.


These vehicles will cater for the wealthier part of the population for whom the locally produced models do not comply with their needs. This part of the population are oriented towards generalist brands and models of segments A, B, C and D.


It is likely that the vast majority of vehicles produced in Brazil as from 2016 will be from the Land Rover brand and not Jaguar.


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The U.S. market is gradually returning to its pre-crisis levels
 

The U.S. market is slowly returning to its pre-crisis levels (2000-2007), since it should end the year 2013 on a volume of registrations of around 15.5 to 16 million units.


In 2007, just before the outbreak of the financial crisis, the U.S. market had reached 16.2 million units, previous years were even better (17 million in 2005 and 16.5 million in 2006).


In 2013, the U.S. market is gradually approaching these same volumes and is gradually moving away from 2009, figures where it fell to 10.4 million units.


This market has increased by more than 5 million units between 2009 and 2013, which represents an increase of over 50% in four years. Meanwhile (between 2009 and 2013), the European market 27 countries (similar to the U.S. market in terms of volume) lost 17% of its sales volume, and has dropped by 25% since 2007.


Which manufacturers have benefited the most from the recovery of the U.S. market? Themarket share comparison of different automotive groups between 2009 and 2013 reveals that the builders who have made the most progress since 2009 are the Fiat-Chrysler group (+3 points), Renault-Nissan (+1 point), Hyundai-Kia (+1 point) and Volkswagen (+1 point).


In a rising market, on the other hand GM (-2 points), Toyota (-3 points), Honda (-1 point) have lost market share.


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