The freeway market - France

The global motorway concession market, with its specific focus on France, has experienced several significant trends and challenges since 2020. The market saw a downturn in 2020 due to the economic impacts of the COVID-19 pandemic, causing a near standstill in traffic and resulting in a decline in the sector's sales by roughly €2 billion. Despite this setback, the market showcased continuous growth, underpinned by sustained demand for electronic toll subscriptions and toll price increases linked to the consumer price index. France, with three major players—Vinci, Eiffage, and Abertis—dominating the market, had to navigate through macroeconomic factors such as the elasticity of motorway traffic to GDP, with a long-term variation of 1.2% to 1.7% for a corresponding 1% variation in GDP. The increase in toll rates in 2022 was a response to the high inflation rates of 2022-2023, and while a real surge in toll rates is not expected until 2025, there were regulatory guidelines in place ensuring toll changes did not exceed specified limits. Within this context, motorway concessionaires also faced significant environmental and technological challenges. They invested in solutions like plant-based Biosphalt and the construction of ecoponts despite roadwork and traffic contributing to pollution. Electronic toll collection saw growth in subscriptions with the Liber-t pass for light vehicles and the Tis-pl pass for heavy goods vehicles. However, the strength of this market was juxtaposed against a static national vehicle fleet and evolving consumer preferences toward alternative, eco-friendly travel modes. With a sizable portion of the French motorway network under concession, and the looming expiry of major concessions in the 2030s, the market stood at a crossroads that could potentially see a reshuffling of market leadership or nationalization trends similar to those in Spain..Title: Fluctuating Dynamics in the French Motorway Concession Market Post-COVID-19 In the wake of the COVID-19 pandemic, the French motorway concession market saw a sharp decline in its primary revenue stream—motorway traffic. The downturn in 2020 was marked by a significant slump, nearly €2 billion in the sector's overall sales. Post this period, the market evidenced a rebound, with indications of continuous growth. This resurgence was fueled by a robust demand for electronic toll subscriptions and a rise in toll prices over the past two years, linked to the consumer price index. Delving into the typology of demand, the market sees a segmentation with business customers mostly falling under CI 3 and CI 4 vehicle classes and private customers accounting for lighter vehicles in CI 1, CI 2, and CI 5 categories. A closer look reveals that light vehicles dominate motorway usage with their presence being roughly five times that of heavy vehicles. Pricing dynamics indicate that despite the higher toll charges for commercial vehicles, light vehicles contribute a greater share of revenue, accounting for between €7 billion and €8 billion, approximately 66% of sales, compared to €3 billion to €4 billion from heavy vehicles. The French motorway concession market, however, is not impervious to macroeconomic factors. Demand is closely tied to the country’s economic health, with long-term elasticity of motorway traffic to GDP estimated between 1.2% and 1.7% for a 1% variation in GDP. This sensitivity is more pronounced in heavy vehicle traffic, which is directly influenced by economic fluctuations and toll rate changes. Fuel prices also play a pivotal role, with a 1% rise in oil prices leading to a 0.33% decrease in vehicular volume per kilometer. Seasonal trends impact the market considerably, with a marked increase in traffic during the summer holidays. This period typically sees elevated freeway usage despite the preference for coastlines being a consistent driver of seasonal demand. Vinci particularly benefits from these trends due to its strategic locations. Technological advancements have introduced a new market dynamic with electronic toll collections replacing traditional toll booths. The proliferation of subscription services like the Liber-t and Tis-pl passes for light and heavy vehicles, respectively, underscores this change. These services have seen a significant uptake over recent years but must be evaluated in the context of a national car fleet that exhibits trends towards stagnation. In terms of regulations, the motorway sector operates within strict parameters established by PIARC, with toll.### The Titans of Tarmac: Vinci, Eiffage, and Abertis Pave the Way in France's Motorway Concession Market In France, the motorway concession market is not merely a field of commerce; it's an arena where giants tread. Three behemoths—Vinci, Eiffage, and Abertis—dominate the tarmac, each leveraging decades of expertise, strategic positioning, and infrastructure investments to maintain their stronghold in a lucrative yet fiercely protective industry. **Vinci: A Colossus on French Roads** The name Vinci has become synonymous with motorways in France. More than just a market leader, Vinci is an institution in the domain of motorway concessions. With its vast network of roads that lace through France, reaching from the windswept coasts of Brittany all the way to the bustling border with Italy, Vinci not only facilitates the flow of holiday traffic during peak season but also keeps the economic arteries of the nation pulsing with steady trade and transportation throughout the year. **Eiffage: Mountain Mover and Market Maverick** Eiffage might play second fiddle to Vinci in terms of sheer scale but holds its own with strategic mastery over central and eastern France's motorway landscape. Whether it's serving the winter holiday rush to the Alps or managing large-scale constructions like the A79, Eiffage is a formidable player whose expertise in engineering and project management ensures that it remains a key competitor in the French motorway market. **Abertis: The International Influencer** While Vinci and Eiffage contend dominantly with the French territory, Abertis casts a wider net. With a portfolio that includes significant stretches of France's motorway network and expanding global reach, Abertis bridges national borders with its operations. In France, it solidifies its position within the triumvirate of top concessionaires through its subsidiary Sanef, managing key northern routes and gateways to neighboring European countries. Each of these titans brings a unique set of strengths to the table: Vinci with its unmatched network, Eiffage with its engineering acumen, and Abertis with its international perspective. They navigate a complex web of economic, environmental, and regulatory challenges, perennially expanding and innovating to maintain their supremacy in a market resistant to new entrants. As the French motorway concession market looks ahead to an era of potential transformation, with concessions expiring and environmental sustainability becoming more pressing, the strategies adopted by these powerhouses will likely shape not only their own future but also

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 23/01/2024

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Summary and extracts

List of charts

• Trends in the size of the motorway concession market
• Average daily motorway traffic
• Top 10 countries by length of motorway network
• Trends in the size of the global road and highway construction and maintenance market
• Top 10 countries by length of motorway network
• France's favourite destinations for the All Saints' vacation 2023
• France's Top 3 favorite destinations for summer vacations in 2023
• Percentage of French people who went on summer vacation who stayed in France.
• Evolution of interest in "Ulys" research
• Evolution of the average French fleet
• Poll: What form of trnasport do you plan to take this summer?
• Annual change in toll rates
• Main contributors to the 29 million tonnes of CO2 emitted by the motorway sector
• Environmental expenditure by motorway concession operators
• Number of Liber-t pass subscribers
• Number of pass Tis-pl subscribers
• Workforce trends for the three main players in the motorway concession market
• French motorway network under concession
• Distribution of French freeway mileage between concessionaires
• Breakdown of motorway concession market share

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