Automobile Industry Faces Significant Challenges Amidst Market Decline
Declining sales, rising prices, and ecological transitions prompt a fight for survival among automotive manufacturers
The global automobile industry is currently experiencing one of the most turbulent periods in its history.
In France, vehicle registrations have dropped by 12% compared to the previous year, and projections indicate a minimum 20% decline in new orders.
Anne-Marie Baezner, director of the Lyon Motor Show set to take place from September 24 to 28, noted the market is reaching levels unseen since 1974, with May 2025 marking the fifth consecutive month of sales decrease.
It is anticipated that vehicle sales could fall to between 1.9 and 2 million units by the end of the year, down from a typical figure of over 2.5 million units.
Key factors influencing this downturn include a sharp rise in new vehicle prices—around 25% over the last five years—driven by production costs and raw materials.
Florian Aragon, CEO of Toyota France, cited fierce competition from Chinese manufacturers and a significant ecological transition as primary conditions constraining consumer behavior.
The push for 100% zero emissions by 2035 has imposed additional costs, including various taxes on vehicle weight and carbon dioxide emissions, with the latter penalty for high emissions potentially reaching up to €60,000 annually.
In a recent development, EU member states have agreed to relax emission regulations, granting manufacturers an extended deadline for reducing emissions from new vehicles, from annual assessments to evaluations over a period of three years, spanning 2025 to 2027. Ivan Segal, Sales Director at Renault, described this change as a positive outcome, suggesting it may alleviate immediate penalties and foster demand for electric vehicles, which currently comprise only 15% of the market in Europe, falling short of intermediate targets.
Amid these challenges, some manufacturers report positive sales trends.
The Renault 5, which has sold over 40,000 units since its launch, has emerged as the top-selling electric vehicle in France.
Ivan Segal remarked on the vehicle's popularity and expressed optimism with the upcoming launch of the new Renault 4. Similarly, Toyota has achieved approximately 140,000 sales in France in 2024 and is planning to introduce six new electric models within the next year, including the recently unveiled Aygo X, the first self-charging hybrid in its category.
Despite facing daunting obstacles, automotive manufacturers continue to adapt to the evolving market landscape.
In France, vehicle registrations have dropped by 12% compared to the previous year, and projections indicate a minimum 20% decline in new orders.
Anne-Marie Baezner, director of the Lyon Motor Show set to take place from September 24 to 28, noted the market is reaching levels unseen since 1974, with May 2025 marking the fifth consecutive month of sales decrease.
It is anticipated that vehicle sales could fall to between 1.9 and 2 million units by the end of the year, down from a typical figure of over 2.5 million units.
Key factors influencing this downturn include a sharp rise in new vehicle prices—around 25% over the last five years—driven by production costs and raw materials.
Florian Aragon, CEO of Toyota France, cited fierce competition from Chinese manufacturers and a significant ecological transition as primary conditions constraining consumer behavior.
The push for 100% zero emissions by 2035 has imposed additional costs, including various taxes on vehicle weight and carbon dioxide emissions, with the latter penalty for high emissions potentially reaching up to €60,000 annually.
In a recent development, EU member states have agreed to relax emission regulations, granting manufacturers an extended deadline for reducing emissions from new vehicles, from annual assessments to evaluations over a period of three years, spanning 2025 to 2027. Ivan Segal, Sales Director at Renault, described this change as a positive outcome, suggesting it may alleviate immediate penalties and foster demand for electric vehicles, which currently comprise only 15% of the market in Europe, falling short of intermediate targets.
Amid these challenges, some manufacturers report positive sales trends.
The Renault 5, which has sold over 40,000 units since its launch, has emerged as the top-selling electric vehicle in France.
Ivan Segal remarked on the vehicle's popularity and expressed optimism with the upcoming launch of the new Renault 4. Similarly, Toyota has achieved approximately 140,000 sales in France in 2024 and is planning to introduce six new electric models within the next year, including the recently unveiled Aygo X, the first self-charging hybrid in its category.
Despite facing daunting obstacles, automotive manufacturers continue to adapt to the evolving market landscape.