France
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 |
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| 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 |
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| 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 : CCFA, best-selling-cars.com |
| Top 5 brands (total market) | 1. Renault (406,222 new registrations in 2018, -2.5% compared to 2017) 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).
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| Model preference top 5 (total market) | 1. Renault Clio (123,658 new registrations in 2018) 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: CCFA, Le 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. |
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| Evolution fleet sales (last 5 years) | Situation at the end of 2018 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 Europe, Observatoire du Véhicule d'Entreprise Situation after the first half of 2019 France's corporate vehicle market had its best H1 in 2019 since 2016. The sector posted 451,629 registrations (cars and LCVs) in the first half of the year, +8.08% compared to the same period last year. There were increases for both cars (+8.85% to 265,464 units) and LCVs (+7% to 186,165 units). The overall figure for H1 2019 is 1.42 million, a decline of -0.58%, which indicates significant losses on the privat market. This confirms the corporate vehicle market as the main engine of overall automotive sales in France. Source: Arval Mobility Observatory |
| Top 5 fleet brands (fleet market) | Situation in December 2018 1. Peugeot Source: Dataforce/Fleet Europe
Leasing represents 39% of H1 2019 sales in France, for a total of 454,992 units. For a number of premium brands, leasing even represents more than half of all sales. They are: Among the mid-market brands, some still score significantly higher than the national average: Two brands score near the national average: And some fall far below: Source: Autoactu.com |
| Fleet Model preference top 5 (fleet market) | ALL MAKES In H1 2019, French manufacturers provide all 10 of the most popular fleet models. In a Top 10 previously entirely dominated by diesel models, three petrol models have crept in – testament to the growing diversification of fleet vehicle powertrains.
The Peugeot 3008 Diesel has had to give up the first position it occupied at the end of 2018 to the Renault Clio Diesel. Over the same time period, the Peugeot 208 Petrol gained four places and the Peugeot 5008 dropped five places.
In six years time, the share of SUVs in corporate registrations has nearly tripled, from 13% in 2012 to 36.3% in 2018. At the end of H1 2019, the figure stood at 37.5%. Here are the figures for the first half of 2019:
As at the end of 2018, the Peugeot 3008 leads the SUV ranking in French fleets – with twice the number of registrations of the second model on the list.
Top 10 registrations LCVs in corporate segment, H1 2019
Source: Arval Mobility Observatory
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Chapter 4: Taxation & legislation
Get the complete analysis about taxation and legislation in the Fleet Europe Taxation Guide, developed in collaboration with PWC. Click here for more info
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 € |
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| 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
