ExpertEye European Automotive Report Q3 2016 | Page 16

France – Domestic demand boosts growth and with it residual values

..

Economic Forecasts

Little has changed in the domestic French economy since last quarter

2015 2016 2017 2018

GDP growth (%. yoy)

1.3

1.3

1.4

1.7

Inflation (%. yoy)

0.1

0.3

1.3

1.4

Unemployment (%)

10.4

10.0

9.9

9.6

Public budget balance (% of GDP)

(3.5)

(3.3)

(2.9)

(3.1)

2015 was such a strong year that exports stalling for the first three quarters

Gross public debt (% of GDP)

96.2

96.4

96.8

97.1

of 2016, particularly in the aircraft sector, have remained a drag on growth.

Current account balance (% of GDP)

(2.0)

(2.1)

(2.3)

(2.6)

Security and terrorism remain a drain on growth forecasts but are also
increasing the swing to right-wing politics and nationalism which makes next
year’s election very difficult to call.

This leaves private consumption as still being the key driver for growth over
the coming years. With the reduction in labour tax and the emergency

RV Index: 36 months / 90,000 kms
120

employment plans kicking in Unemployment is expected to continue on the
downward trend and when combined with the reduction in fuel prices which
are still flowing through the system overall household purchasing power is set
to improve further.
Despite the continuing very low levels of inflation partly as a result of the
fall in oil prices the improvements in employment prospects and private

Europe Average

France

115
110
105

100

household budgets is being seen in the Economic Sentiment Index which then

As forecast last quarter the growth in French new car sales has reduced
significantly and by the end of September 2016 registrations were up only
5.7% over 2015 and this fell to 4.7% by the end of October as the market
dropped 4% for the month. Overall we believe there is likely to remain
volatility in the remainder of the year with a likely full year volume around
European Automotive Report - 2016 Quarter 3

95
90
2010 01
2010 05
2010 09
2011 01
2011 05
2011 09
2012 01
2012 05
2012 09
2013 01
2013 05
2013 09
2014 01
2014 05
2014 09
2015 01
2015 05
2015 09
2016 01
2016 05
2016 09

correlates ot the increases seen in RVs.

Sources: European Commission – Economic Forecasts ExpertEye AG - RV Index
Bowkett Auto Consulting Ltd - Forecast vehicle sales

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