French automotive suppliers sound the alarm
After plastic supplier Novares went into receivership last week, France’s automotive suppliers sound the alarm about the plan for a gradual restart. The Vehicle Equipment Federation (FIEV) calls for a quick and massive support plan for automotive purchases. They want to empty the stocks and rejuvenate France’s aging automotive fleet at the same time.
“This is just the beginning. We can expect deadly cash effects for businesses that don’t have enough reserved. There will be bankruptcies,” notes Roger Pernat, President of the automotive and military supplier Pernat Industries. After plastic specialist Novares went into receivership last week, the French Vehicle Equipment Federation (FIEV) is worried about the sector’s future.
OEMs represent 72 000 jobs in France spread across 120 companies. Behind important names such as Faurecia, Valeo, or Plastic Omnium, follow smaller actors but still important for the automotive sector such as Lise Automotive (mechanical fixings), Le Bélier (Aluminium parts), or GMD (metallic and plastic parts). Together they represent between 0,5 to 1,5 billion euros in revenues.
“The fall in our turnover was dizzying in April with -80% or -90% in some French sites. These are magnitudes that have no precedent. As for the recovery in May, it remains weak, with 40% of usual volumes,” explains François Liotard, Managing Director of Lisi Automotive.
Even though these companies have received help from the French authorities, they are still worried about their future sales, as dealerships have accumulated important stocks of unsold cars. The Federation and the OEMs are calling for another car-buying incentive, another scrap incentive.
“Dealerships’ stocks are huge. It is absolutely essential to empty this pipe in order to be able to fill it again with new products. Plus, this allows us to rejuvenate France’s aging fleet of cars that is more than ten years old. This is why we are advocating for a plan that goes beyond just new vehicles,” explains Claude Cham, President of the FIEV.