[Atlas] France : the parts market rebounds
After 2020 ended with a 7% decline in turnover of spare parts distributors, and a decline of 9% for repair shops, our latest ranking of the top 100 French independent distributors suggests that the 2021 financial year (ending in December) looks to be an excellent vintage. Barring a last-minute problem, it will have proved to be a new start for many distributors.
Many used 2020 and any government-sponsored loans available to optimise their stock and their logistics flows. Boosted by a record-breaking first quarter (+14.5% vs. 2020) and second quarter (+29.5%), and despite a decline in the third quarter (-0.5%), analysts expect 2021 to end with an increase of at least 9% compared to 2020, and even 2% above 2019, the so-called “reference year”.
Pressure on supplies
There was an unprecedented combination of sustained domestic consumption, no lockdown, typically French holiday breaks and sales of new vehicles in free fall (down 30% compared to expectations). This encouraged and boosted demand for servicing and repairs. However, tensions appeared in 2021. In addition to supply problems for independent distributors linked to an erratic restart of production, shortages of raw materials also caused an escalation in the price of parts. This pressure caused at least two of the major players in European and global parts distribution to complain in a letter sent at the end of November to their suppliers. And those who had anticipated by over-stocking saw their shelves gradually emptying. A situation even more frustrating as the business is there! And it doesn't appear to be over yet. Fabrice Godefroy, president of the IDLP group (the leading independent French group), recently declared in our columns that “if the 2021 financial year looks promising, 2022 is looking very uncertain, with stock orders that could be restricted”.