ACEA

- FRANCE

Important from the beginning

As a nation, France has made innovative and entrepreneurial contributions to the development of the automobile. French inventors played leading roles in achieving the technological breakthroughs that have made the European industry what it is today. Indeed, Nicolas Joseph Cugnot may well have been the first to build a self-propelled vehicle in 1769 – a steam-driven contraption called a fardier à vapeur. Nearly a century later, Etienne Lenoir received a patent for the first successful internal combustion engine. The creation in 1894 of De Dion-Bouton et Cie laid the foundation of the French auto industry. The company produced its first petrol-engined four-wheeled car in 1899 and by 1900 was the world’s largest carmaker with annual production of 400 cars and 3,200 engines. Other French firsts include the issuing of automobile license plates in 1893.

Pillar of the national economy

The automotive sector is a key driver of the French economy and the country’s leading employer. France is Europe’s second largest car producer after Germany and the world's fifth largest behind the United States, Japan, Germany and China. In 2005 (the most recent year for which official figures are available), worldwide production by French manufacturers was 5.9m cars and trucks, of which 3.54m were made in France.

The motor industry’s economic impact is therefore quite substantial: in 2005 alone, automotive industry production, including automobiles and automotive equipment totaled more than €90bn, a 64 per cent increase in value since 1996. Automotive products represent 15.4 per cent of French exports.

The top two national manufacturers, PSA Peugeot Citroën and Renault, account for over half of the domestic market. Foreign manufacturers are not hugely present in France but Swatch produces in Hambach (Lorraine) and Toyota in Valenciennes (Nord-Pas-de-Calais). Across the country, almost 40 different vehicle models are produced in 21 assembly plants.

Leading employer

As already mentioned, the automotive industry is also France's leading employer, providing 298,000 direct jobs, mainly at PSA and Renault. Equipment suppliers employ a further 128,000 people, and business, repair, service and recycling companies employ 493,000 staff.

Suppliers

The French automobile industry sits at the hub of a network of materials and parts suppliers. It is the largest customer of major industrial sectors such as plastics, industrial rubber, casting and industrial metalworking services. The automotive supply industry’s combined turnover is close to €25bn. With 42 per cent of their production earmarked for export, suppliers are very much focused on the international market.

At the forefront of R&D….. and in clusters

The competitiveness of all automobile industries depends heavily on their capacity to innovate which, in turn, requires powerful R&D activities. France’s automotive companies spend over €4.3bn a year on R&D. Since 1999 the automotive sector has been the national leader in terms of corporate research and development spending and accounted for 16 per cent of the national total in 2005. Between 1998 and 2003, the automotive industry’s gross domestic expenditure on research and development rose by 52 per cent, far exceeding the pharmaceutical industry (€4bn), the radio, television and communication equipment and components industry (€3.3bn) and the aviation and space industry (€3.3bn). In total, French car manufacturers devote 5% of their turnover for research and development, while the equipment suppliers have doubled their R&D investment over the last ten years.

Michelin, Valeo, Faurecia, Delphi, Visteon, Robert Bosch, Johnson Controls, Siemens VDO Automotive operate research units and technical centres throughout France. Delphi, the world's leading parts manufacturer, has set up a European technical centre in the Paris area for its power, chassis, and steering activities that employs 400 researchers.

But spending does not guarantee success unless there is a steady supply of trained technicians and researchers. Many of these come from public research institutes such as IFP (French Petroleum Institute) and INRETS (National Institute for Research on Transportation and Safety). France is also well equipped with specialized institutes of higher education such as ESTACA (Ecole Supérieure des Techniques Aéronautiques et de Construction Automobile) and ENSPM (Ecole Nationale Supérieure du Pétrole et des Moteurs),

As in Germany, various regions specialise in automotive-related activities, notably Ile-de-France, Nord-Pas-de-Calais, Champagne-Ardennes and Alsace. The Ile-de-France region is one of the most important automotive clusters and is known as the research centre of the French automotive industry. Almost one third of the 60,000 people working in the automotive sector in this area are engaged in researching and developing the cars of the future. In total, 75 per cent of French R&D activities are located in and around the capital. PSA alone operates five R&D centres in France, the most important one of which is in Vélizy in Ile-de-France. The region also houses Renault’s Technocentre where nearly 11,000 people are employed.

In border-free Europe, the Alsatian automotive cluster is situated as a direct neighbour and customer of Germany. PSA produces 400,000 units per year at its Mulhouse site. More than a third of the automotive suppliers based in this region have their own research and development departments. The Stuttgart system supplier, Behr, for example has more than 100 engineers and researchers working on the development of a carbon dioxide climate control.