Do you have the feeling that the prices of new cars have increased in 2021? It’s not just an impression. Supporting figures, L’argus found that inflation was higher at Renault and Dacia than at Citroën, Peugeot and DS. Explanations.
Sell less, but earn more: this is the strategy advocated by Lucas de Meo since his arrival at the head of the Renault group in July 2020. Unlike his predecessor, Carlos Ghosn, the Italian no longer advocates the race for volumes which resulted, in the end, in big discounts to sell the productions and a decrease in the residual value of the vehicles. He relies more on an increase in the margins generated by model. Unfortunately, for customers, it translates into higher selling prices. At the beginning of June, we had already devoted an article to this soaring prices. The objective, in the long term, is to go from an average price of only € 20,000 in 2019 to more than € 27,000 in 2025!
But inflation does not only affect the Renault group. At PSA (Citroën, DS and Peugeot), there have also been cascading increases. Were they more important than at Renault? Argus takes stock of the situation in several categories, taking “core-range” finishes as examples. They are the ones that make comparisons easier and constitute the bulk of sales. The entry-level versions are, on the contrary, shunned by customers … which led Renault and Dacia to remove them, by automatically raising the entry ticket. The cheapest Sandero now starts at € 9,990, but with much better equipment than the old “Access”, which was offered at € 8,690 until July.
We dealt separately with electric and plug-in hybrid cars for which the brands’ strategy was different. Does price inflation only affect French women? To answer it, we took examples from Volkswagen or Toyota. Many foreign brands are housed in the same boat, as evidenced by an Audi dealer:
“We have never “experienced this; a lot of cars have taken a € 5,000 increase. Or at least 150 € more per month in LOA. Our ranges are exploding completely in terms of price.
City cars
Inflation before the disappearance? Despite the shutdown of production scheduled for December 2021 of the Citroën C1 and Peugeot 108, this has not prevented prices from increasing by 3 to 4%. Nothing comparable, however, with the spectacular + 11.8% recorded by their rival Renault Twingo SCe 65, in Zen finish. This, however, has an admissible excuse, because its equipment has been considerably enriched in the process: air conditioning, multimedia system with touch screen, rain sensor, height-adjustable driver’s seat or folding passenger seat are now standard.
Versatile city car
Unlike its little sister Twingo, the Clio Zen SCe 65 has rather reduced its endowment, in particular by losing its rear grab handles. However, the price of the one that is now entry-level has gone from 17,300 to 18,100 €, an inflation of 4.62%. On the TCe 100 GPL Intens version, the increase is € 450, or 2.11%. Same story for the E-Tech 140 hybrid, whose increases barely exceed 2%, in Zen as in Intens. Excluding the electric version, the Peugeot 208 is no better off, just like the Citroën C3 and Toyota Yaris. But the prize goes to another production of the Renault group, the Dacia Sandero, whose prices have risen four times during the year. If the increase is limited to 1.01% on the Essentiel SCe 65, it goes up to 10.33% for the Stepway Eco-G 100 Essentiel, despite the elimination of the fog lights!
Urban SUVs
In this category, the Captur registers increases of up to 4.85% for the 1.3 TCe Intens. But the power of this engine has also improved: it now has 140 hp, instead of 130 hp. The 100hp 1.0 TCe LPG can’t say the same, which hasn’t stopped its price from climbing 4.33%. Inflation is therefore higher than for Peugeot 2008, DS 3 Crossback, Volkswagen T-Cross or even Citroën C3 Aircross. However, the small Chevron SUV is the only one of these five competitors to have evolved this year, with a restyling and the addition of rear parking assistance to the standard equipment. For the Dacia Duster, the mid-career facelift step was accompanied by increases of up to 5.79% for the Comfort Eco-G 100 version. But the addition of a multimedia system with a touch screen 8 inches, instead of a simple radio, at least partially justifies it.
Compact
Launched in the fall, the new DS 4 and Peugeot 308 obviously could not be integrated. As for the Citroën C4, still very recent, it was satisfied with a small increase in 2021, between 200 and 400 €. The match therefore appears a little uneven for the Renault Mégane, which recorded inflation of up to 3.13% for its TCe 140 Intens version. The diamond-shaped compact can however be consoled by saying that the Volkswagen Golf 8 recorded increases of up to € 1,815 for the 2.0 TDI 115 Style 1st, or downright 5.39% more than in December 2020!
Compact and family SUVs
Although close to retirement, the Renault Kadjar has revised its financial claims upwards. The Techno finish (ex-Intens) has climbed more than 5% in one year, both in gasoline and diesel. By the way, the manufacturer has stripped it from the folding passenger seat and the leather of the steering wheel has been replaced by a less expensive “soft touch” material. Renault is preparing the ground for the replacement, the Austral, whose prices will rise. Conversely, the Peugeot 3008 showed wisdom since prices remained almost stable in 2021. Inflation was also lower for the Citroën C5 Aircross, DS 7 Crossback, Toyota C-HR and even for the Volkswagen Tiguan, whose increases have sometimes exceeded 2,000 €!
Koleos, Kadjar’s big brother, has also seen its prices rise by almost 5%. Quite the opposite of a Peugeot 5008 which remains below the 1% mark or of a Toyota RAV4 which is between 1 and 2%, excluding the rechargeable version. As for the Renault Espace, it even exceeds 10%: the price of its Zen finish, which has become Evolution, has taken € 4,900 in twelve months. In its defense, the endowment has been enriched by the seven-seater and the fatigue detection system in series but that does not justify everything.
Family
Less and less popular, family sedans embody the top of the range of their respective manufacturers. In the literal sense of the word, since their catalog prices are always higher. This time, Peugeot hit the hardest, with + 7.08% for the 508 BlueHDi 130 Allure Pack, i.e. € 2,850 to be added compared to the end of 2020. As for the Renault Talisman, prices still climbed by more than 4%, while production will be stopped in 2022. Launched in 2021, the DS9 came out with an increase of between 1.93 and 2 , 10%, which still represents an additional € 1,000.
Electric cars
Electric vehicles have not followed suit. The Renault Zoe and Peugeot e-2008 are, in fact, the only French models in our ranking to have seen their prices drop, while the Twingo E-Tech Electric, Citroën ë-C4 and DS 3 Crossback e-Tense border on the perfect stability. For the latter, however, it should be noted that the equipment has been greatly reduced in the process, with the elimination of the parking aid and the safety pack including autonomous emergency braking up to 140 km / h, lane departure warning and blind spot monitoring.
Reasonable builders? Difficult to do otherwise because how to increase the price of vehicles that are not cheap and on the other hand sell more in order to meet their CAFE goal of reducing CO2 emissions at the end of the year. In a context of a shortage of parts, priority has been given to the production and delivery of zero-emission cars as evidenced by their shorter delivery times than those of thermal versions.
Plug-in hybrids
With their ultra-low standardized consumption, plug-in hybrids are the other lever for manufacturers to reduce their C02 emissions. Logic, therefore, that they try to push buyers towards these models, with generally lower inflation than for their thermal alternatives. The finding is however less obvious than for 100% electric. The DS 9 E-Tense took € 2,000, instead of € 1,000 for the PureTech 225 petrol version. The surprise comes from Toyota since the prices of the RAV4 plug-in hybrid have plummeted by more than 7% in one year!
Conclusion
The semiconductor crisis, the rise in the cost of transport and raw materials, … have had repercussions on prices. Not to mention that the brands must also compensate for the drop in their sales volume in 2021. However, as announced by the bosses of Renault and Volkswagen, the increase in tariffs will continue while electric models will have to go the other way if they want to become more democratic. The electric revolution is at this price since the margin is much lower on this type of vehicle than a thermal. While waiting for the fall in the cost of batteries, manufacturers are looking for solutions to preserve their profitability. One of them is the reduction of distribution costs thanks to direct digital sales and the overhaul of the dealer remuneration system from 2022. Thus, the era of producing more to earn more is over. Now, manufacturers prefer to sell less but better, hence the necessary move upmarket advocated by Mazda or Renault. But at this rate, some buyers will turn away from new products to the second-hand market, a movement that is already underway.