Market Report: France

From the July 2019 issue.

Even though the French trailer industry is reeling from disruptions arising from the yellow jacket movement, there are economic reforms in progress that are key to the State’s industrial reconquest.

Trading economics indicate that the French economy grew 0.3 per cent on quarter in the three months to March 2019 – the same as in the previous period and matching a preliminary estimate and market expectations. Household consumption rose further while fixed investment eased and net foreign demand contributed negatively. The Gross Domestic Product (GDP) rate in France averaged 0.78 per cent from 1949 until 2019, reaching an all-time high of eight per cent in Q3 1968 and a record low of -5.30 per cent in Q2 1968.

French industrial production increased in 2017 and 2018, which the State says is part of the country’s ‘industrial reconquest’. This is being achieved by ‘courageous policy choices’ that the country is in the process of implementing. These include: reduction of tax on capital; the relaunch of the cultural battle for industrial jobs with a view to making new generations understand that industry means innovation and real career prospects; investment in innovation, specifically research tax credit, two years of extra amortisation for robotisation for industrial SMEs and the Fund for Innovation and Industry; as well as a major European component: the creation of a Franco-German electric battery sector that is set to enable the creation of about 2,000 industrial jobs in France over the following three years.

In 2018, 60 new factories opened, while only 40 closed. Over the last two years, three of every four threatened industrial job has been saved along with 90 per cent of threatened industrial sites. The French Government is investing €500 million in ‘Industry of the Future’, while 10,000 SMEs are being lent assistance and €15 billion has been invested in the Investment in Skills Plan (PIC – Plan d’investissement dans les compétences).

In protest of President Macron’s economic reforms, particularly rising fuel prices and living expenses, the yellow jackets movement (which formed late last year) has since disrupted roads and fuel depots and incited riots, garnering international attention.

The French market in terms of commercial vehicle registrations was down 4.2 per cent at the end of April but it is still maintaining high levels, according to Marketing Director at Chereau, Christophe Danton.

“The sales tendency (order intake) for 2019 is so far very good at +14.9 per cent,” he says. “This good result does not reflect our global 2019 vision as we plan a significant slowdown for the second semester due to the following reasons: financial results of transport companies – there was clearly a financial impact due to the yellow jackets (French strike movement that started mid-November); less transported volumes; and a driver shortage.”

Jean Baghdad, Managing Director of SAF-Holland France, confirms a positive trend that reflects ‘relatively good’ economic data in the country with reference to Gross Domestic Product (GDP) growth (2017: +2.3 per cent; 2018: +1.5 per cent).

“The market has developed very well, especially the trailer market with +14 per cent growth in 2018,” he says. “The first four months of 2019 also show positive figures with new registrations of +9 per cent for trucks with more than five tonnes and +8 per cent for new trailer registrations. For 2019, the same number of pieces is expected as of 2018 because in France there is still a lack of drivers and mechanics and this slows down growth. For SAF-Holland France, this means a stable market setting and positive prospects for future growth.”

Meanwhile, the likes of Schmitz Cargobull has been operating in France for the past two decades, initially with the opening of a sales office. The trailer builder’s France headquarters is within close proximity to Lyon and features a yard for used trailers and a warehouse for spare parts.

Head of Marketing Communications & PR, Anna Stuhlmeier, says a sales and after-sales team covers the whole country together with 120 service partners including 20 reefer specialists dedicated to the repair and service of the Schmitz Cargobull Cooling units S.CU.

“Two other outlets are reported to be located in Rennes and Nancy in order to offer the best services in the whole country,” she says.

The French market is innovation-oriented, according to Stuhlmeier, and French customers request the best technologies available in order to track and control their Total Costs of Ownership (TCO).

“Telematics, data management and financial services are also growing market segments where Schmitz Cargobull offers the best technologies,” she said. “The reefer customers demand high quality standards (ATP) and flexible products due to the density of the distribution network. The French market remains highly influenced by the culture of distribution, which requests strong and competitive products for example within the dry freight segment. Given the development of the business via internet that trend should get stronger in the next years.”

One major trend that is clear, according to Schmitz Cargobull, is the call for action on climate change and CO2 emissions.
“Together with the EcoDuo solution and the electrical cooling unit, Schmitz Cargobull is perfectly in line with those requests and brings relevant proposals to the market,” Stuhlmeier says.

In terms of supporting industry events in France, Schmitz Cargobull is exhibiting its latest transport solutions, including the curtainsider S.CS Power Curtain, reefer S.KO Cool Smart, tipper S.KI and S.KO Express along with financial and maintenance offers, via a roadshow set for September.

“As one of the major players in Europe, the French commercial vehicle industry has a strong tradition for innovation due to very competitive market conditions,” Stuhlmeier says. “The medium-term innovations and requests will be influenced by the services (finance, second- and third-life of used trailers and preventive maintenance) as well as data management (cold chain and distribution).”

JOST also supports the commercial road transport industry in France, providing operators with fifth wheels, landing legs, axles, turn tables, hitches (ROCKINGER), king pins, container components, hydraulic cylinders and steering systems (Tridec). The heavy-duty equipment specialist has head offices in Ris Orangis, south of Paris, and offices in Lattes, which is close to Montpellier.

Around 28,245 trailers were registered in France in 2018. JOST confirms the main trailer builders in the country include Fruehauf, Benalu Group, Chereau, Lamberet, Magyar and Legras and ASCA.

Known for changing the way trailer builders think about axles – specifically multifunctional e-axles that can electrically charge integrated components such as refrigeration units – VALX expanded its service network following the employment of a French sales representative earlier this year.

After an extensive trip throughout France, according to  Bart van den Boomen, sales representative at VALX, the company has signed agreements with TIP France and Bassigny among others. “In the past four years, Reseau Poids Lourds – a family business that first opened its garage doors in Rozay-en-Brie in 1977 and offers a new and used truck sales service, spare parts support as well vehicle rental services – has purchased 336 trailers on VALX axles from Lecitrailer.”

While France’s growth may have slowed, according to the International Monetary Fund, it remains resilient and job rich, in part reflecting important labour-market and tax reforms implemented in recent years. These key areas for reform involve safeguarding fiscal sustainability and bolstering public-sector efficiency; boosting employment and productivity; and strengthening the resilience of the financial sector.

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