A colossal market

The worldwide automotive sector represents a colossal market worth over 1 000 billion dollars per year, with the annual production of 66.5 million vehicles. However, it is also a sector which is experiencing increased competition from Asian manufacturers and countries with low manpower costs, in terms of the bid for new industrial development projects. In order to maintain competitive production, developed countries must necessarily turn to innovation and
the development of new equipment and vehicles with high added value. France has decidedly opted for this solution.

A sound of industrial foundation

France currently manufactures 3.5 million vehicles on 20 different assembly sites, which makes it Europe’s second leading manufacturer, accounting for 17.1% of total European production. France’s two leading manufacturers – PSA and Renault – are respectively ranked 8th and 10th worldwide. They offer significant opportunities for parts manufacturers, which has enabled an efficient supply chain to be built up around international companies such as Faurecia and Valeo. The French automotive industry employs a total of 300,000 people, not including the further 400,000 people employed in related parts supply and service sectors. The quality of the French automotive industry is recognized worldwide and relies on a vast network of specialized training centers, including: Cesti/Supmeca (Center for higher education in industrial techniques), l’Ecole nationale des professionnels de l’automobile – GARAC (National school for professionals in the automotive industry), ENSAM (National higher school for trade), ESTACA (Higher school of Aerospace and automotive manufacturing), Institut français du pétrole (French Petroleum Institute), etc.

Many foreign investment projects

For the past ten years, France has ranked among the top European countries in terms of attracting automotive investment in the Europe zone (40,000 jobs created by foreign investment projects over 10 years). The large number of foreign automotive manufacturers based in France include: Toyota, which chose to locate

2nd largest automotive industry in Europe

its Yaris production site at Valenciennes (4,000 employees), and its ED2 design center at Sophia-Antipolis; Daimler Chrysler, which manufactures its Smart model at Hambach in the Lorraine region, working with many of the parts manufacturers located at the industrial supplier site. Foreign parts manufacturing companies – including the biggest names in the sector such as Delphi, Bosch, Sanden, Magna – represent 64% of sales and 70% of exports in this sector.

Among the major investors in 2006, one can mention Modern Engineering. In September 2006, the American company announced plans to open a new site at the Metrotech technology hub in Saint Jean de Bonnefonds, near Saint Etienne (165 high added value jobs within three years). Modern Engineering, founded in 1946, aims to optimize manufacturing processes and the rolling stock manufacturing supply chain. The main factors in this investment decision were: the quality of local research and training facilities, the presence of a significant number of partners and clients already located in the area, the existence of clusters (Car, Integra, Rhône-Alpes Automotive Cluster, Viameca, Lyon Urban Truck and Bus), and the support of the French national and local authorities.

A sector geared toward innovation

France’s leading manufacturers, PSA and Renault, invest 5% of their turnover in R&D, which makes the automotive industry the biggest industrial investor in R&D in this country, with a total of 30,000 research scientists and technicians. These

30,000 research scientists and technicians work on programs in this sector.

researchers and technicians work on programs that involve the combining of expertise from various different fields such as electronics, materials and energy, which explains the importance of partnerships in this sector. PSA for example, has entered into a strategic partnership with Fiat, to produce utility vehicles in the Nord-Pas-de-Calais region of France (Sevelnord); and with Saint Gobain, Faurecia and the Japanese company Ibiden, to develop a clean diesel engine with particle filters. Parts manufacturers are also active: Faurecia for example is at the forefront of worldwide research into active and passive pedestrian and passenger protection. Industrials can also benefit from the large network of public research centers, such as Inrest, Aec, Inria, CNRS, LCPC, and IFPEnsmp. France is at the forefront of worldwide research in the fields of hybrid motors (demo vehicle equipped with HDi hybrid motor), electric vehicles, automotive electronics, innovative materials, and surface coatings.
The creation of clusters, such as Mov’eo in the Seine Valley, Véhicules du Futur (Vehicles of the future) in the Franche-Comté and Alsace regions, Automobile de haute gamme (Luxury vehicles) in the Loire region and in Rennes, Lyon Urban (Truck and Bus) in the Rhône-Alpes region, Mobilité et transports avancés (Mobility and advanced transport) in the Poitou-Charentes region, has enabled these strengths to be optimized, by creating new perspectives for the launch of innovative project partnerships involving a number of foreign companies.