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the cars; when new is surpassed by the second-hand market

Automobile: when new is surpassed by the second-hand market

Individuals are buying fewer and fewer new cars. Rise in tariffs, increased taxation, energy maelstrom ... how did the car market get there?

The car is slipping on a bad slope. It is once again becoming a luxury product.  There is one clear sign: individuals are buying fewer and fewer new cars.  Now in the minority, they now represent only 45% of total registrations, an erosion of five points in four years.  In 2019, 3.3% of French households bought a brand new vehicle.  Thirty years ago, they were 7%.  Even if it is more than offset by other sales channels, in particular that of corporate fleets, this decline is not trivial.

 Such a scissor effect, also perceptible in other European countries, translates less the advent of a utilitarian conception which would swallow the car to the rank of a simple tool of displacement than the shadow cast by several perceptible transformations within French society.  .  Indirectly, this shift also testifies to the difficulties that brands are experiencing in adapting to the energy revolution that they must bring to fruition.

 Creeping gentifrification

 The social base of buyers of new models has been shrinking steadily over the past few decades as a result of higher prices and heavier car-related taxes.  The customer profile is increasingly focused around categories with significant purchasing power.  Employees at the top of the ladder, liberal professions and retirees are overrepresented in dealership halls.  The median age of the buyer?  He is inexorably approaching the age of 60.  His average expense?  It is increasing steadily and is now running close to 25,000 euros, discount deducted.  A creeping gentrification that hardly succeeds in thwarting the rise of low cost brands, whose clientele is shared more or less fairly between households on a constrained budget and those who, more affluent, simply refuse to devote as much resources as before  to the acquisition of a car.  The object, frankly, is no longer supposed to reflect its position in society.  The success of long-term rental plans (LOA) also suggests that the ownership relationship has become slack.

 Dropping out is not just the result of manufacturers or the consequence of the technological and safety enrichment of automobiles.  It also reflects the impoverishment of part of the middle classes.  It should come as no surprise, then, that the second-hand market broke records again last year.  With 5.7 million units, it now weighs almost three times heavier than the new home market (2.2 million).  "With the electrification of ranges, prices will certainly increase but manufacturers are still able to offer individuals, via long-term rental formulas, monthly rents contained", argues however Amaury de Bourmont, director of trade for  Citroën and DS.

 The famous December rebound

 In the shorter term, several factors contribute to dissuading candidates from buying.  In large cities, the prospect of a traffic ban opposed to diesel as well as the instability of ecological taxation, but also the opening of the energy spectrum (between micro-hybrid, hybrid, rechargeable hybrid, all-electric, LPG  , Flexfuel, there is something to get lost in), singularly complicate the choices.  And sometimes make people disappointed.  “Some motorists who, in recent years, have abandoned diesel and opted for a petrol engine have found that it cost them much more than expected.  Suddenly, they find themselves a bit lost and prefer to wait or give up changing vehicles, "says Flavien Neuvy, who heads the Cetelem Observatory of the automobile.  Driving a hybrid is not necessarily synonymous with savings and opting for all-electric means having faith pegged to the body.

 The channels which compensate for the reflux of individuals have ambivalent effects.  The increase in sales to corporate fleets has created a fundamental movement that did not start yesterday.  “Companies use the company car as an additional remuneration.  This allows those who benefit from it to feel valued and to ride with models that they would probably not be able to afford by themselves, "summarizes Flavien Neuvy.  Contrary to the distancing often observed among private buyers, the company vehicle, usually reserved for executives and business managers (not without respecting a strict hierarchy in the allocation of models and finishes), welcomes the signs  social status exteriors.  It gives a clear preference to the most upscale brands, gives pride of place to SUVs - while demarcating the last land of choice for large sedans -, does not skimp on chrome, big wheels and equipment with high technological content.  To facilitate its resale, the company vehicle banishes overly original colors.  We will stick mostly to white, gray or black.

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 The spread of other practices, modestly grouped under the term of "tactical sales", has also changed the relationship with the automobile.  These are vehicles made available to short-term rental companies for a few months, but also and above all, registrations made by the dealers themselves.  "Network remuneration is increasingly closely linked to the achievement of sales targets.  So, when it lacks a bit of volume to reach them, we can use demo vehicle registrations which will then be sold as zero kilometer opportunities, "says Amaury de Bourmont.

 The very artificial rebound in the Einglish automobile market recorded in December 2019 (an increase of 27%) reflects the intensity of this traditional race for volumes in the last month of the year which encourages garages to siphon their stocks with the means available.  We can also, and above all, see the translation of the tremors caused by the upward recasting of the ecological penalty incurred in 2020. In December 2019, the dealers have in fact registered in disaster certain models that have become virtually unsaleable because exposed to counting  from January 1, 2020 to a tax deemed dissuasive.  Rather high-end, powerful and well-equipped cars that will have to find a buyer as a "recent opportunity", at a bargain price.  Some good deals in prospect for individuals ...