France

Last modification: 5 Feb 19
Introduction: 

France is one of the leading countries in Europe, both politically and economically. It is one of the five permanent, veto-wielding members of the UN Security Council (the UK is the only other European one). It is also the founder and main member of La Francophonie, the worldwide community of French-speaking nations.

By purchasing power parity, France is the EU's second-largest economy (after Germany) and the ninth-largest in the world (having recently surpassed the UK). The world's largest insurance company and bank are both French (Axa and BNP Paribas, respectively). 

With over 83 million foreign visitors a year, France is the world's first tourist destination. A considerable part of this visitor flow is centred on Paris. 

Typical for France is its strong tradition of state interventionism in the economy. The French state retains majority interests in the country's main railway, electricity, aircraft, nuclear power and telecoms companies. 

Due to its heavy investment in nuclear power, France is the smallest emitter of CO2 among the G7 nations. More than 70% of the electricity produced in France is generated by nuclear energy. That context makes it hard for renewable energies to take off. 
 

Chapter 1: Economic and business environment

Demographics

65.4 million (2019 estimate)

Source: World Population Review

Capital

Paris (2.2 million) Source: World Population Review http://worldpopulationreview.com/countries/france-population/

Major cities

Paris, Marseille (795,000), Lyon (472,000), Toulouse (433,000), Nice (339,000), Nantes (277,000), Strasbourg (275,000), Montpelier (248,000), Bordeaux (232,000), Lille (228,000).

Source: Geonames

Languages

French

GDP

$38,418 per capita (2017)

Source: countryeconomy.com

Unemployment rate

8.9% (Nov. 2018)

Source: Eurostat

Main industries

Services (employing around 70% of the workforce), tourism (France attracts 84 million tourists a year), agriculture (the world’s second-largest agricultural exporter), industry (electronics, chemicals, telecom, textiles, automotive). 

Paris is the world’s second-largest hub of multinationals, home to more than 500 HQs at present. France is home to 29 of the companies on the 2017 Fortune 500 list (including BNP Paribas, Peugeot and Christian Dior). Fashion contributes around €150 billion to GDP annually, more than aerospace and automotive combined. 

Source: InterNations

Currency

Euro

Interest rate

0.70% (Dec. 2018)

Source: Ycharts

Fleet Maturity Index (scaling)

5/5

Political key info

France is a unitary representative democratic republic. Following approval by referendum in September 1958, the authority of the executive branch was increased in relation to the parliament. This regime is called the ‘Fifth Republic’. 

Most authority resides with the president, who is elected for a term of five years. The parliament consists of the National Assembly, which has broad powers, and a Senate, with more limited powers.

French politics is dominated by various parties along a broadly left-right axis, with a substantial nationalist fringe at the extreme right. The victory in the 2017 presidential elections of Emmanuel Macron, who campaigned as a nonaligned centrist, broke this mould. 

As seems traditional with French presidents, Macron’s initial broad popularity has rapidly given way to wide anger and open revolt against his proposed reforms. 

Inflation

1.59 % (Dec. 2018)

Source: inflation.eu

Chapter 2 : Automotive market, segments & sales

Total Car park

39.1 million passenger cars (1 January 2017), 1.2% more than in 2016. 

Of this total, 82.8% are registered to private owners, also up 1.2% (despite the growing interest in carsharing and ridesharing).

The diesel share of the total car park in France diminished from 62.2% in 2016 to 61.6% in 2017.

Source: lelynx.fr
 

New vehicle registrations (Cars, LCV, Trucks)

In 2018, 2,632,607 new light vehicles (<5.1 tons) were registered in France, an increase of 3.3% (about 60,000 units) over the previous year. 

Of these, 2,173,481 were new passenger cars, an increase of 3% over 2017. French brands represented 1,246,915 units (57.4% of the total), a volume increase of 8.3% in comparison to 2017.

As for light commercial vehicles (<5.1 tons), 459,126 new registrations were recorded in 2018, an increase of 4.7% over the previous year. 

The number of heavy vehicles (>5.1 tons) registered in France last year was 54,298, an increase of 7.7% compared to 2017.

As in other European markets, new vehicle registrations in France dropped significantly in the last quarter of the year due to the introduction of new WLTP-based regulations. Looking at the first three quarters alone, the French new car market grew by 6.5%.

Source : CCFAbest-selling-cars.com

 

Top 5 brands (total market)

1.    Renault (406,222    new registrations in 2018, -2.5% compared to 2017)
2.    Peugeot (389,518, +6.2%)
3.    Citroën (213,844, +6.2%)
4.    Dacia (140,326, +19.1%)
5.    Volkswagen (140,313, +0.7%)

Despite a drop in sales, Renault remained the best-selling brand in France last year. The gap with Peugeot, which saw sales increase, narrowed from 50,000 units in 2017 to just 17,000.

Dacia delivered the most remarkable performance, increasing sales by nearly a fifth to take fourth place from VW (albeit by a margin of only 13 units).  The German brand remains by far the largest foreign car brand in France. 

Other good performances further down the list: Toyota (+10%), Fiat (+15%, up two places to 8th-largest brand), Mercedes-Benz (entering the top 10) and BMW (up one spot). 

Less good: Ford (-2%), Opel (from 8th to 9th place), Nissan (dropped out of the top 10) and Audi (sales down by more than a fifth). 


Source: best-selling-cars.com

 

Model preference top 5 (total market)

1. Renault Clio (123,658 new registrations in 2018)
2. Peugeot 208 (102,395)
3. Peugeot 3008 (84,834)
4. Citroen C3 (77,937)
5. Dacia Sandero (70,077)

Source: best-selling-cars.com
 

Used car market/renewal cycle

In 2018, 5,632,358 used vehicles were sold in France, a decline of 0.8% compared to the previous year. 

2017 was a record year, though, with 5,683,102 used cars sold (+0.7% over 2016).

In 2017, the used-vehicle market was still dominated by diesel (64.6%, down from 66.6% in 2016), but used petrol cars were up by 7.6%. Hybrids and electrics comprised a mere 0.1% of the market.

Most popular brands in 2017: Dacia (+15,6%), Kia (+12,1%) and Toyota (+9,3%). The most popular model, however, remained the Renault Clio (6.6% of the entire market). 

In 2017, the average age of a used vehicle being sold was 9.07 years (versus 8.96 years in 2016). One in six used vehicles was older than 16 years. 

Source: CCFALe Mobiliste

 

Chapter 3: Company car market

Total Fleet Park (company cars)/Fleet penetration in total fleet sales

7.7 million (around 20% of the total)

Source: Le Monde

On average, French companies retain a vehicle for 4.9 years (EU average: 5.7 years). For large companies, the average is 3.6 years (in France, 5 years in the EU). 

Source: Observatoire du Véhicule d'Entreprises, July 2018.

Evolution fleet sales (last 5 years)

Unlike in Germany, the UK and Italy, where True Fleet sales declined in 2018, the market showed positive growth in France.

In 2018, a total of 818,648 new cars and LCVs were registered by corporates in France. That's an increase of 2.1% over the previous year, and the third annual record in a row. In contrast to previous years both cars (+2 % to 476,269 units) and LCVs (+2,3 % to 342,379 units) participated equally in the growth. 

Most of the growth centred on the first part of the year, before September, when the new WLTP regulations came into effect. In anticipation of that, the number of corporate registrations surged by 6.2% in August. In September, on the other hand, corporate registrations dropped by -12%, followed by -4.4% in both November and December. 

Diesel registrations were down -5.2% (for company cars and LCVs together). With 642,803 registrations, diesel retains a 78.5% market share, six percentage points less than in 2017. No less than 93.51% of newly-registered corporate LCVs in 2018 were diesels (320,156 units in absolute numbers). That dwarfs the other motorisations: petrol (13,477 units), electric (7,205) and hybrid (756).

Petrol registrations were up 42.2% (for company cars and LCVs). With 131,212 registrations, petrol now has a 16% market share, 4.5 percentage points more than in 2017. Singling out company cars, petrol had acquired a market share of 24.7% by year's end.

Registrations of electric vehicles (company cars and LCVs) were up 45%, a clear acceleration compared to last year's increase (25%). With 17,130 registrations, this segment for the first time represents more than 2% of the entire corporate fleet in France.

Registrations of hybrids (company cars and LCVs) increased by 41.1% to 26,475 units, which represents 3.2% of the entire fleet market in France. Most (19,307 units) are still 'classic' hybrids, with just 7,168 PHEVs.

Source: Dataforce/Fleet EuropeObservatoire du Véhicule d'Entreprise

 

Top 5 fleet brands (fleet market)

1.    Peugeot
2.    Renault
3.    Citroën
4.    Volkswagen
5.    Mercedes

(Dec. 2018)

Source: Dataforce/Fleet Europe

 

Fleet Model preference top 5 (fleet market)

1.    Renault Clio (38,420 units sold in 2017)
2.    Peugeot 3008 (32,710)
3.    Peugeot 208 (24,360)
4.    Peugeot 308 (23,120)
5.    Renault Mégane (21,040)

Source: L’Opinion
 

Chapter 4: Taxation & legislation

In France, company cars are subject to

1.    Vehicle registration tax
2.    The malus, a tax on vehicles with high CO2 emissions
3.    Company car tax (TVS, for Taxe sur les véhicules de société)
4.    Value-added tax

1.    Vehicle registration tax
The tax amount is based on the cylinder capacity (horsepower) and the engine power (kWh) of the vehicle and varies according to place of registration. Non-polluting vehicles running entirely or partially on electricity, CNG, LPG or superethanol E85 can be entirely or partially exempted from this registration tax. An additional registration tax, according to gross vehicle weight, is due only for goods or people transport vehicles from a certain size and upwards. The tax is due each time the vehicle is registered.

2.    The malus, a tax on vehicles with high CO2 emissions
To discourage the use of dirty vehicles, a surcharge on the basis of CO2 emissions is added to many car models. The rules vary depending on whether the car was registered before 1 January 2008. New vehicles registered after that date have to pay the tax 

a.    If they’ve been granted EC Type Approval and their CO2 emissions rate is at least 155g/km in 2010, 150g/km in 2011, 141g/km in 2012, 135g/km in 2013 and 130g/km in 2014, 2015, 2016, 126g/km in 2017, 119 g/km in 2018 and 117 g/km in 2019. See graph below for the 2019 malus:

CO2 in g/km

Rate in €

 

 

 

 

 

 

117

€35

 

143

€860

 

167

€4,253

118

€40

 

143

€953

 

168

€4,460

119

€45

 

144

€1,050

 

169

€4,673

120

€50

 

145

€1,101

 

170

€4,890

121

€55

 

146

€1,153

 

171

€5,113

122

€60

 

147

€1,260

 

172

€5,340

123

€65

 

148

€1,373

 

173

€5,573

124

€70

 

149

€1,490

 

174

€5,810

125

€75

 

150

€1,613

 

175

€6,053

126

€80

 

151

€1,740

 

176

€6,300

127

€85

 

152

€1,873

 

177

€6,553

128

€90

 

153

€2,010

 

178

€6,810

129

€113

 

154

€2,153

 

179

€7,073

130

€140

 

155

€2,300

 

180

€7,340

131

€173

 

156

€2,453

 

181

€7,613

132

€210

 

157

€2,610

 

182

€7,890

133

€253

 

158

€2,773

 

183

€8,173

134

€300

 

159

€2,940

 

184

€8,460

135

€353

 

160

€3,113

 

185

€8,753

136

€410

 

161

€3,290

 

186

€9,050

137

€473

 

162

€3,473

 

187

€9,353

138

€540

 

163

€3,660

 

188

€9,660

139

€613

 

164

€3,756

 

189

€9,973

140

€690

 

165

€3,853

 

190

€10,290

141

€773

 

166

€4,050

 

191 and up

€10,500

b.    If they’ve not been granted EC Type Approval and their taxable horsepower is higher than 5hp. See graph below:

6-7 hp

€ 3,000

8-9 hp

€ 5,000

10-11 hp

€ 8,000

12-16 hp

€ 9,000

>= 16 hp

€ 10,500

Exemptions are available for handicapped drivers, large families and for vehicles running on superethanol E85.
Next to the malus for polluting vehicles, there are also bonuses for who purchases or hires a PHEV, and for who scraps a diesel and replaces it by a non-diesel.

3.    Company car tax (TVS, for Taxe sur les véhicules de société)
The TVS is an annual tax, payable per quarter. It varies depending on the car’s CO2 emissions rate.

CO2 (g/km)

Tax/g

≤ 20

0

> 20 ≤ 60

1

> 60 ≤100

2

> 100 ≤ 120

4.5

> 120 ≤ 140

6.5

> 140 ≤ 160

13

> 160 ≤ 200

19.5

> 200 ≤ 250

23.5

> 250

29

 

Since October 1, 2013, an additional tax is levied on company cars depending on both the type of fuel used (i.e. excluding vehicles running exclusively on electricity) and the year of first registration. The tax amount per vehicle is as follows:

Year of first registration of the vehicle

Gasoline(EUR)

Diesel(EUR)

Until December 31st 2000

70

600

From 2001 to 2005

45

400

From 2006 to 2010

45

300

From 2011 to 2014

45

100

From 2015

20

40

Exemptions include taxis, cars running on superethanol E85, cars using  both fossil fuels and LPG and emitting less than 100 g of CO2/km, and all cars emitting less than 60 g CO2/km.
Private use of a company car (including for commuting) is an ‘avantage en nature’ (i.e. a benefit in kind) and is subject to personal income tax and social security contributions by the beneficiary.
Employers can estimate the value of the BIK based on the various actual costs (i.e. fuel, depreciation, etc), or by calculating a lump sum.  

4. Value-added tax
Both the purchase and leasing of cars are subject to the standard rate of VAT (20%). This VAT is not deductible when there is private or mixed (business/private) use – which means most cases. Some exceptions:

  • Vehicles intended to be resold as new;
  • Vehicles to be leased;
  • Vehicles with eight passenger seats and up, used by companies to transport their staff to work. 
  • Vehicles acquired and used exclusively for transport (buses, taxis, hearses, etc.) or for driving tuition.
  • Trucks, pickups, vans.

From 1 January 2019, VAT on petrol is 40% deductible. That rate will continue to increase over the next years, in order to align the VAT treatment of petrol and diesel. 
In order to register a foreign-bought used car in France, the reseller must prove the VAT regime under which the vehicle was acquired. The measure is to prevent resellers in France using the second-hand VAT regime (so-called ‘VAT margin Scheme’) for vehicles which are not eligible to this regime. 
 

Source: Fleet Europe Taxation Guide 2018, Droit-finances

 

Vehicle taxes represent more than 20% of a vehicle’s TCO. However, the fiscal cost of a specific vehicle type can vary greatly, depending among other things on its CO2 emissions. Two examples: 

A Toyota Yaris Hybrid 1.5 VVT-I Business 208, emitting 75 g of CO2 per km and thus not subject to the malus tax (on high-polluting vehicles) will be taxed a total of €716, or (written off over 48 months) €15 per month. 

For a BMW X6 xDrive30d Lounge, emitting 183 g of CO2 per km, the malus is €7,890 at purchase. Adding in other taxes, that makes €44,854 in total taxes over 48 months, or €934 per month. 

Source: OVE

Chapter 5: Car policies

Car policies in French companies focus mainly on TCO but include a number of other key issues, such as the satisfaction the cars provide to their employees, and the corporate image that the vehicles help to project.

  • French brands dominate in French corporate fleets, which can be seen as a projection of ‘loyalty’ to the country’s native automotive industry. 
  • It’s also a way of expressing modesty, as foreign cars are often considered more ostentatious.
  • For large companies, the choice for French brands may also be motivated by the substantial discounts they have obtained from the manufacturers, and by the extensive network of dealers offering after-sales services.
  • Excellent after sales, of course, is also an argument that works for smaller companies.
  • Car options are a good way to increase employee satisfaction, help safeguard RVs and limit rental levels. But there usually is a strict limit, with employees sometimes able to acquire more options at their own cost. 
  • Despite limits on CO2 emissions, the share of SUVs in corporate fleets is increasing, in response to employee expectations (for both family and professional use). 
  • Although the share of diesels is declining, the TCO argument for diesel remains strong in many cases.
  • Unbundling long-term contracts is an increasingly popular way for fleet managers to pinpoint and replace services they deem too expensive. As a result, independent suppliers are offering a growing number of services (from tyre management over on-site repairs to washing services, fuel cards and more). 

Source: Source: Fleet Europe Special Benelux – France

Chapter 6: Funding methods

Of the 2,534,607 new vehicles (<3.5 tons) registered in 2018 in France, 562,646 were under leasing contract. That’s 10,256 units more than in 2017, or +1.86%.

Leasing represented 58.53% of all new-vehicle registrations for French companies and professionals in 2018, or 432,153 units out of a total of 738,346. That figure is 9.45% for national and local governments, 21.47% for rental car companies and 3.2% for private consumers. 

The growth of leasing was a bit below that of the overall vehicle market (+2.89% to 2,534,607 new cars and LCVs), so its penetration rate declined from 22.42% in 2017 to 22.2%. 

In all, leasing operators in France had 1,448,178 vehicles in their fleets (+6.74%) and managed a further 425,958 vehicles for others (+10.72%). That’s a total of 1,874,136 vehicles (+7.62%). The increase is the result of the ongoing expansion of leasing in the SME segment and, to a smaller extent, private customers. 

Source: SesamLLD/Fleet Europe

Chapter 7: Fuel

In 2017, the share of petrol and diesel in new-car registrations was still equal at 47% each. In 2018, petrol took a clear lead: 55% market share versus just 39% for diesel. 

Electric-vehicle sales increased strongly in relative terms, but only slightly in absolute terms: from 24,910 to 31,059 units, or from 1.18% of overall sales in 2017 to 1.43% in 2018.

Source: best-selling-cars.com

As the figures for January 2019 show, diesel continues its fast retreat in France. In that month, overall new-car registrations in France dropped by 1.1% (compared to January 2018). That decline was entirely due to the significant retreat of diesel. 

  • Diesel (-17.8%) represented 34.2% of total sales in January (compared to 47.3% for the whole of 2017, 38.9% in 2018, 35.8% just for December 2018). The retreat of diesel was felt stronger by some brands: Peugeot (-23.1%), Renault (-25.1%), Ford (-35.7%), Opel (-53%), Nissan (-65%) and Fiat (-49%). Only VW (+40.8%) swam against the stream. 
  • Registrations of new petrol cars were up (+8.9%) and represented 58% of all new-car registrations in January. This follows a surge of 18.3% against the whole of last year, when petrol cars represented 54.7% of all new registrations. Benefiting from the petrol surge were Opel (+42%), Toyota (+22%), Kia (+21%), Suzuki (+26,6%) and Mini (+19,5%). 
  • Registrations of pure EVs were up +138%, to 2% of total sales in January. This is up from just 1.4% market share for the whole of 2018 – ending on a strong 2.7% for December. With almost 1,500 units, The Renault Zoé represented 49% of the total volume in 2018. About 40% is divided between the Nissan Leaf, Smart Fortwo, BMW i3, Kia Niro and Hyundai Kona. 
  • Traditional hybrids represented 4.2% in 2018, 5% in January 2019 (+5.3% over the same month last year). Toyota dominates, representing about 70% of the market. 
  • PHEVs represent just 0.7% of the overall market in January. Just five models make up 78% of total PHEV sales in January (high to low): Volvo XC60, Outlander, Volvo XC90, Range Rover Sport et Mini Countryman. 

Source: Autoactu
 

Once, French corporate fleets were diesel by default. That’s changing fast. The powertrain equation in the French leasing market (cars and LCVs) looked like this at the end of 2018:

  • Diesel: 410,207 units (-8.6% vs. 2017)
  • Petrol: 126,757 units (+47.7%)
  • Hybrid: 16,962 units (+56.9%)
  • Electric: 8,469 units (+25.5%)

Over the whole year, diesel had a market share of 72.91%, petrol 22.53%, hybrids 3.01% and EVs 1.51%. But those figures don’t adequately reflect the huge shift that took place last year. Only in January, diesel still had a share of 78.77%. By December, that had fallen to 67.81%. Inversely, petrol increased its share from 16.58% at the start of the year to 26.59% at the end of it. 

Diesel does remain the most profitable and most chosen motorisation for certain circumstances, notably for the 42-month, 98,000-km contract type. But on the other hand, the full-electric version of the Hyundai Kona already accounts for more than 40% of its fleet registrations.  

Source: Fleet EuropeDataforce/Fleet Europe

Looking at motorisations, there was a 33.4% increase in registrations of company cars with a petrol engine – despite the overall drop of 9.6% for the True Fleet market. As a result, the petrol share of True Fleet registrations shot up to 29.4% in December 2018 vs. December 2017. That’s a new record for petrol in a market that until recently was almost entirely dedicated to diesel. 

Strong increases were also noted for EVs (+34.4%) and Hybrids (+22.8%), while PHEVs dropped significantly (-15.1%). However, some PHEV versions of large SUVs did score very well, notably the Land Rover Range Rover Sport and the Volvo XC90. 

This will certainly have been influenced by the high malus that the French vehicle taxation allocates to the typical CO2 range of a large SUV, so opting for a PHEV version appears the logical choice.

Source: Dataforce/Fleet Europe
 

Chapter 8 : TCO components

  • Depreciation: 41.1%
  • Taxes: 22.0%
  • Maintenance, Insurance, Tires: 20.7%
  • Fuel: 12.6%
  • Financing: 3.6%

The Corporate Vehicle Observatory takes into account not just the TCO of the vehicle, but also the TCO of the driver, the TCO of the fleet, and the TCM (Total Cost of Mobility).  

Driver behaviour obviously impacts the risk of accident and thus the cost of insurance, but also the amount of fuel spent and the cost of maintenance and repair. ‘Driver TCO’ can add up to 50% of cost to overall TCO.

According to a survey by SNLVLD (French Association of Vehicle Lessors) in 2015, the ‘fleet TCO’ averaged out at 58 hours of admin per fleet vehicle. 

Source: OVE

Chapter 9: Safety, insurance and telematics

Cars driving in France need to be equipped with the requirements necessary for the safety of its occupants and that of other road users. These are:

  • high-visibility vest
  • safety triangle
  • breathalyser

The vehicle must also have working lights and front windows of at least 70% clarity. 

Source: Service public


Nearly half of all companies with fleets of at least 50 vehicles have not yet worked out a road safety policy (that figure rises to 65% for fleets of 10-49 vehicles and to 78% for fleets smaller than that).

No more than 14% of French corporate fleets are using telematics solutions (other than those just using driver smartphones for data collection). That figure increases to 27% with larger companies.

Source: Observatoire du Véhicule d'Entreprises, July 2018.

Chapter 10: Environment

Due to the rising popularity of petrol, the average CO2 emissions of France’s overall leasing fleet have risen by two points from 2017 to 2018, to 109.35 g/km. Meanwhile, the average emissions of France’s overall fleet have only risen by a single point, to 114.39 g/km.  

Source: Fleet Europe

From January 16, 2017, Paris has become the first municipality in the country to put in place a Restricted Traffic Zone. A system of discs (known as Crit’Air) categorises passenger cars according to the type of powertrain, segment and date of first registration. Passenger cars registered before January 1, 1997 have been banned from Paris since last July.

Source: Fleet Europe Taxation Guide 2018

Chapter 11: Mobility

Since 1 January 2018, all French companies with at least 100 employees are obliged to produce a PDE (plan de déplacement d'entreprise, or 'corporate mobility plan') offering alternatives to traditional, one-person-one-car business mobility. 

Source: Fleet Europe

Chapter 12: Key trends to watch