After
enjoying several years of growth, increased consumer awareness, and heightening critical acclaim, French
automakers appear poised for a tough 2006. According to online newspaper NewKerala.com, the companies are fighting
eroding sales in Europe and grappling with diminished product margins which appear likely to affect their bottom line
this year.
Executive-of-the-Moment Carlos Ghosn fears that Renault has been hobbled by an over-dependence on Megane
sales in France– what he calls the ‘Fiat Syndrome: extreme dependence on one segment and one country.’ The Megane,
which has long been a top seller, has begun to falter, losing 30 percent in November. Peugeot’s 1007 has been
enduring soft sales.
Other contributing factors to a potentially lackluster 2006 include a home market whose
growth isn’t as robust as in years past, and an increase in the number of new models among French automakers, which can
erode profitability even while boosting sales numbers.