U-turn in the automotive industry. After years of sharp price increases, the new vehicle market should become more affordable in the coming months.
An average price of 36,327 euros
This summer, manufacturers took a new direction, resulting in a first drop in average prices for the first time in years. According to AAA Data, the average price of a new vehicle sold in France was €36,327 in July compared to €36,700 the previous month.
A drop that can also be seen over the course of a full semester, with an average price that fell again below 36,000 euros between January and July (35,926 euros), or 450 euros less than in the second quarter of 2023.
Currently the discounts are quite low, but some brands have reduced their prices even further this summer. This is the case, as noted The Parisianfrom MG, Toyota, Citroën and even Fiat.
Following Tesla in the spring, Toyota has crushed the prices of some of its vehicles, such as the small hybrid SUV C-HR which costs 3,000 euros less. Hyundai, for its part, knocked 4,000 euros off its small electric Kona or even the Chinese BYD which went 5,000 or 6,000 euros off its high-end models.
At the same time, French manufacturers are preparing to offer more affordable electric prices with the Renault R5 and the Citroën ë-C3, which will help reduce average prices.
Finally, it is the traders who are increasingly willing to act to sell their shares. Discounts of 15 or 20% are no longer rare after years in which it was the sellers who were in a strong position.
Reductions that will benefit the purchasing power of cars, which has been weakened in recent years. In six years, the average price of a new vehicle has increased by 10,000 euros, going from 26,000 euros in 2018 to almost 36,000 this year. Increases that are explained by the arrival of new hybrid or electric engine technologies that have increased the bill. But not only that. The shortage of components after Covid and the concentration of brands in the high-end range with greater added value contributed to this inflation.
But the market has now signalled the end of the recession. Potential buyers, who are also choosing between their other spending items, have informed manufacturers that they no longer intend to continue this price increase. After three months of a rather contained decline, registrations fell sharply in August to -24% year-on-year.
A very violent market crash that manufacturers had not anticipated. The result: stocks of unsold vehicles are mounting in factory parking lots and brands are forced to launch huge car clearance sales.
The price drop has begun and, according to experts, manufacturers will engage in a fierce price war in the coming months. There will be no shortage of good deals for buyers.
Source: BFM TV
