French Automotive Industry Impact of Consumer Perception on Government Policies

Presented by Anindit Borkotoky Chirag Thakkar Pallavi Jauhari Ritika Sharma Sagarika Roy

Flow of the Presentation

1.
2. 3.

4.
5. 6.

Introduction Consumer Perception(Survey) Role of French Government Mergers and Acquisitions Cars of the Future Conclusion

Introduction to Automobile Industry

European countries are the second leading automotive

manufacturer, including France 3.5 million vehicles;

France ranks 5th

For the past ten years, France has been ranked among the

top European automotive manufactures. French automotives include PSA Peugeot-Citroen, Renault. The French automotive industry has grown mainly by joining with many franchises

Quantitative Data
In France, out of 31 million registrations ,59.6% vehicles belong to

lower economic range.

Majority of the customers nearly 63% have sedan type vehicles. Low-powered cars are booming representing 56%.

It's the top 10 best selling vehicles in 2009 on the French territory

I Actors
Manufacturers

Below is the ranking in terms of sales, leading global: In Europe: 1. Volkswagen 2. PSA Peugeot Citron 3. Renault 4. Ford 5. General Motors 6. Fiat

Subsidiaries Dealers Repairers Equipment manufacturers

II Market

General builder Manufacturers specialists Manufacturers of niche specialists

III-Segmentation
The auto market is segmented by vehicle category. The evolution of demand has prompted manufacturers to continually develop new forms, sizes, designs vehicles leading to a current ranking of 10 segments.
Micro-Citadines

Urban women
The Microspace The compact The compact MPV The Family MPVs The Road The "limousine The 4x4 and SUV

Various general measures were also taken to improve the competitiveness of French industry.
1.

Support demand by promoting clean vehicles through scrapping and bonus Removing the part of business tax base on productive investment The collateral OSEO has guaranteed 690 million of bank loans

2.

3.

4. ADEME has received 50 million additional benefit of

low-carbon vehicles demonstrators

The Auto Pact

Made from a broad consultation concluded with the

States General Auto January 20, 2009, the Auto Pact was announced February 9, 2009 by the President of the Republic. The pact includes a set of measures affecting the entire automotive industry.

Help to finance development programs of manufacturers. Funding for banks' internal manufacturers. Guarantee Fund for loans to suppliers and subcontractors

Mergers & Acquisitions

 Deepening economic recession. Sharp decline in sales.

Why ?

Restricted access to financing. & Significant uncertainty over

which businesses are survived.

Global M&A trends

 Europe and the Middle East retained their

dominant positions in 2008, with Germany alone representing 35 percent of global activity in the sector (up from almost 30 percent in 2007).
Asia was a net M&A investor in 2008,

responsible for 19.9 percent of global deal spends v/s receiving 15.8 percent.
The disparity between
14.7 percent of targets in the Americas 10.9 percent of acquirers from America

Suppliers are likely to remain the backbone

of the M&A market in terms of deal volumes as consolidation continues assuming access to financing can be secured.

A question of technology

The implication is that economies of scale from vast production volumes may no longer be the most significant factor in cost control. Rather, access to best practices and the latest available technologies will become a bigger factor in driving M&A and alliances, the latter being a popular means of sharing R&D capabilities.

PSA-Toyota joint venture

Toyota Peugeot Citron Automobile (TPCA) is a

European joint venture between Toyota and PSA, the parent company of Peugeot and Citroen. The factory in Kolin, Czech Republic builds the Peugeot 107, Citroen C1 and Toyota Aygo. Until the introduction of the Toyota's tiny iQ, the smallest car that company offered in Europe has been the Aygo. The joint facility has just cranked out its 1 millionth car, a gas-powered C1. Production of the mini-cars started in 2005.

Cars of the Future

Cars of the Future

The Government has funded 1 bn euros for the project

of which 750 mn euros is to fund R&D. To accelerate innovation and the development of new mobility solutions to meet a triple challenge:
Environmental Economic Technology

 The state assistance will take the form of

grants, equity, rights of intellectual property generated, loans repayable advances,

to ensure a return of the benefits of these

projects for the benefit of the community, according to their success.

Conclusion
The industrialization of new products (or services)
Strengthening the competitiveness Job creation in the territory.

Recommendations
Attract Foreign Investors.
Initiative for strategic Alliances. Making use of its geographical Location.

References
http://blogs.oracle.com/irm/entry/renault_under_threat_from_indu http://www.burgessct.com/wp-content/uploads/downloads/2010/11/Secrets-StolenCSO-Article.pdf http://translate.googleusercontent.com/translate_c?act=url&hl=en&ie=UTF8&prev=_t& rurl=translate.google.com&sl=fr&tl=en&u=http://www.industrie.gouv.fr/enjeux/auto/aut o-pacte.php&usg=ALkJrhh9Q7pD03z3OzjsSbIiFwaC97gC4A http://translate.googleusercontent.com/translate_c?act=url&hl=en&ie=UTF8&prev=_t&r url=translate.google.com&sl=fr&tl=en&u=http://www.elysee.fr/president/root/bank_obj ects/09.02.09-Dossier-de-presse-Pacte-auto.pdf&usg=ALkJrhj7v82esWhUfNNpOR4dCa8ZVaUew http://www.autonews.com/article/20100215/EYANE/906109997/1193/ANE http://query.nytimes.com/search/business/?date_select=full&query=French+automobile +industry&type=nyt&src=busfn&x=0&y=0 http://www.reuters.com/article/2008/02/01/autos-france-idUSL0150193520080201 http://www.nytimes.com/2008/11/24/business/worldbusiness/24iht24euecon.18101855.html http://www.france.fr/en/knowing/economy/overview/article/strength-frenchautomobile-industry

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