As Cars Burn In France, The Industry Of Hope Is Booming

Wolf Richter's picture

Wolf Richter

New Year’s Eve was the main event. And it didn’t disappoint: 1,193 vehicles were burned in France in the course of a few hours, said Interior Minister Manuel Valls. Up 4% from 2009, when 1,147 vehicles were burned. A tradition no one has the balls to explain. In the days leading up to the annual rite, Valls had promised "complete transparence," in contrast to the Sarkozy government, which had hushed up the numbers since 2009. But it’s a year-round event: 40,244 vehicles were burned during 2011 and 43,568 the year before. Even Valls was “shocked” by these numbers.

But the massive destruction of functional vehicles (most of them paid for by insurance) wasn’t nearly enough to bail out the automakers. New vehicle sales for the year 2012 dropped 13.9% from the already miserable levels of 2011. Only 1.89 million vehicles were sold, a low not seen since 1997, despite the growth of the population. Particularly alarming: sales by French automakers collapsed, PSA Peugeot Citroen by 17.5%, Renault by 22.1%. All hopes had been riding on their new models—the Peugeot 208 and the Renault Clio 4—which hit the market in the fall, but those hopes have since evaporated.

Other automakers got clobbered as well: Ford was down 19.8%, Fiat, which hardly anyone is buying anymore, fell 23.7%, only to be outdone by GM's beleaguered Opel, down 23.8%. But there were winners: BMW was up 2.3%, Mercedes 5.3%, and Hyundai-Kia 28.2%! So the French automakers, like other French industries, have a complex problem: uncompetitive products in a morose market with unemployment that has been climbing with incessant brutality, and a tax quagmire of unprecedented proportions [“Trench Warfare” Or “Civil War” Over Confiscatory Taxes In France].

But there is one industry that has been booming under these conditions. The industry of hope. Française des Jeux (FDJ), third largest lottery in the world, 72% owned by the state, reported revenues for 2012, and they were hot! €12.1 billion, up 6.1% over prior year. An all-time record. Despite the attacks on its historic monopoly by online gambling.

FDJ prides itself in its 26.3 million “clients”—40% of France’s population of 65 million! Its products are sold in 34,300 retail locations: tobacco shops, bars, newspaper stands and, in French possessions overseas, grocery stores and gas stations. One retailer per 1,895 inhabitants—twice as many as post offices. They’re truly everywhere. And they beckon with hope.

Every day, FDJ says, 8-10 million people walk into these places to surrender voluntarily their hard-earned money, their unemployment compensation, or their social benefits in exchange for a tiny sliver of hope. The hope to become an instant millionaire. Alas, tiny it is: of the 26.3 million clients who in 2012 more or less regularly bought these slivers of hope, 41 became instant millionaires. The odds are not good. But unlike French cars, hope sells.

The record performance was aided by an "exceptional calendar," including three Fridays the 13th (there was one in 2011), three propitious dates—November 10, 2012 (10-11-12), December 12, 2012 (12-12-12), and December 21, 2012 (21-12-12). They perked up the spirits of the lottery-ticket scratchers who shelled out €5.4 billion, up 7.5% from 2011. All games combined rang up €10.7 billion, up 3.7%. Sports betters, who went gaga over two international mega-events, the Olympics in London and the European Football Championship, handed €1.4 billion over to FDJ, a 27% jump from prior year. If only Renault could do that.

Of this ballooning revenue, FDJ "redistributed" 95%, or €11.5 billion. The largest chunk, €7.9 billion was paid out to its lucky “clients.” Over €3 billion was shuffled into the coffers of the state (lovingly called "general interest"), the vast majority via a 23.5% betting tax. And €587 million (4.9% of revenues) was paid in commissions to FDJ’s 34,300 retailers—€17,113 per shop, on average, a substantial source of income for these mostly mom-and-pop operations. That was up 6.1% from 2011, and 15.4% from 2010. There is no crisis in the industry of hope.

Hope of winning the lottery has infected even a French street-theater company whose giant marionettes have become famous around the world. It decided to attack a true giant, an evil American multinational. But there are complications: political connections, government subsidies, Coca-Cola commercialism, and awesome art. Read.... French Artists Strike out Against an Evil American Empire.

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flacorps's picture

More guns. Fewer fires.

news printer's picture

French screen icon Brigitte Bardot on Friday threatened to follow compatriot Gérard Depardieu to Russia, who was granted citizenship for tax exile

NotApplicable's picture

Okay, this was not expected.

orangegeek's picture

Who gives a shit.  It's France.

Iam Yue2's picture

"Despite the attacks on its historic monopoly by online gambling."


Not really quite true....?  Conditions in the market are such, vis a vis regulatory barriers, that most of the big players have stayed out of the market, handing the lions share of the new market to incumbents.  Thus, growth is largely accounted for by greater access, rather than a sudden surge in Frenchies wishing to punt.


Across Europe, gambling, which is supposed to be recession proof, is being hit hard; Greece; Italy; Ireland and Spain (Codere) spring to mind.

THE DORK OF CORK's picture

Trouble in a tours working class neighbourhood a few months ago (this is on the track of the new Tours tram opening later this year)

rsnoble's picture

They should make the game more exciting and spray flammables on the politicians and torch their stupid fucking asses.

Shizzmoney's picture

Here in Boston, we also have a serial car arsonist (got my buddies' car in April; he's been doing it for over 2 years all over the state, and they still haven't found him).

I guess when you take away a human's right of expression; violence becomes that vehicle to express oneself (pun INtended).

steve from virginia's picture


Quelle Unsurprising. The auto industry is dying right under everyone's nose. Kiss it goodbye, Wolf Richter, your favorite boy-toys are annihilating the world's economies.


 - Customers must borrow to buy the cars, which cannot be driven to repay or service the loans.


 - Customers must borrow to buy the fuel as France and other European states have no domestic fuel supply, even if they did the customers would still have to borrow. All the FOREX gains are for exporting countries, BTW.


 - States must borrow to build infrastructure and keep it functioning.


 - Finance lends (and is supported by the state(s) to build destinations and facilities which cannot exist without autos. The autos cannot exist without the destinations and facilities! See 'Spain' which is bankrupted by its real estate lending.


 - The entire auto industry is a web of state- and finance subsidies. Cars are subsidized because people like them, not because they are a good business investment ... they aren't. They are simply luxuries, toys that cost fortunes ... multiplied by the numbers of their rapidly falling bankrupt 'owners'.


 - The total subsidies are tens of trillions of euros, it is the cars- and car infrastructure plus the other toys ... bought and paid for with credit ... which is the economic dead weight that crushes Europe along with the rest of the world. This weight increases grows exponentially every single day.


Here is bankruptcy from the bottom up, it is seen now in Greece and Spain. France is on the ramp to oblivion, it is likely to need a bailout this year like the other PIIGS. It won't really work or 'fix' anything, only postpone the inevitable.


We are undone by vanity and laziness: nothing that can be done to to stop the bankrupting process, It can't be reasoned with, it can't be bargained with, it doesn't feel pity, or remorse, or fear. And it absolutely will not stop ... ever ... until the entire auto-related industry is dead ... including finance, insurance and real estate, provinces, nations and the entire world.

gmak's picture

The thing about a lottery is that it is the cheapest entertainment one can find at the present time. I can get at least 24 hours of fantasy for 1 or 2 bucks.  Where else can you get that? 


Better than renting booze for a buzz and paying all that tax to the .gov, ain't it?

Fezter's picture

If they don't torch cars, how else will they be able to toast their baguettes?

Stuck on Zero's picture

Do the dummies of France who are hoping to win the lottery realize that if they win they have to give it all back to the state in taxes?


User 3461's picture

I remember when torched cars were all the rave in '09. Then it faded...I guess not.

I remember when things in the US looked dire in '09. Then it faded...

Ghordius's picture

I think it was two years ago when in Berlin the police caught one guy responsible of torching 600+ cars - just so for perspective

Manic by Proxy's picture

So, will my Renault spontaneously burst into flame, or will I have to manually ignite it?What the hell good is an automatic if I have to manually ignite it? 

Seer's picture

When I was in the military there was a guy who had a Fiat (124?) parked at his folks' while he was overseas.  It managed to spontaneously combust; and, it wasn't yet paid for.  He was a "stick" guy, so I figure that you don't have to worry about needing to jump-start the fire.  BUT... that's a long time ago, perhaps they've gotten the manual vs. auto spontaneity thing worked out by now.

Azannoth's picture

The Lottery a civilized equivalent of The Hunger Games

Hobbleknee's picture

This must be a violation of Kyoto or some other treaty of faggotry.

NotApplicable's picture

Well, I'll be... I had no idea those type of treaties existed.

Suddenly, the whole world makes sense.

valkir's picture

Kia-who with functioning brain will buy kia?

Diogenes's picture

What if your only choice besides Kia, was a Fiat or Renault?

TSA gropee's picture

As a young family in 1986, we bought a first year (in the US) Hyundai Excel. I remember it distinctly as we bought the Hyundai on Sunday and chuckled about it. It was 1500cc of can't get out of its own way  gutless power but we had it for 4 years without a single problem. That car changed my outlook on Korean cars and since then my family has ownded 3 Elantra's and one Tiburon. My sister owns not one but 2 Kia Optima's and I would own either brand without hesitation. Now I drive a full size Dodge Ram and view small cars like Smart, Fiats and the especially Prius's as possible hood ornaments. In closing, I find Hyundai's and Kia's a bit overpriced now but nonetheless they are  a good car. Perhaps not commenting about something you have no personal experience with may be a prudent thing going forward.  

Seer's picture

Cars/trucks are TOOLS.

While I drive my gutless Toyota to move myself around, it doesn't do well on my property or for hauling stuff, which is why I also have a truck (old pre-electronics diesel).  Your truck would likely end up being a "lawn ornament" on my property, getting stuck somewhere; that's why I have a tractor (Japanese made- it's as bullet-proof as my Toyota, though much newer); but, we're mostly talking autos here...

Setarcos's picture

Obviously you have never had a Kia/Hyundai, otherwise you would know how silly your statement is.

I had a Hyundai Excel and it was, probably still is, a remarkable car - well and truly cured my prejudices, which were similar to your own.

Back in the 60s I was irrationaly prejudiced against Japanese cars and motorcycles, but the facts were that Japanese products were/are far superior to US and British products.

And now it is the turn of Korea and, increasingly China, to lead the way with quality at a reasonable price ... no NOT because of 'slave labour', because labour now comprizes a small fraction of building vehicles, on account of robotics.

I'm not saying that it's good if everyone on Earth gets to own a car, but I am saying that Korean car-makers produce very good cars.

NotApplicable's picture

Superior? Not according to this fine gem of a story.

(I'll admit, I couldn't bear to read it all.)

Seer's picture

"Back in the 60s I was irrationaly prejudiced against Japanese cars and motorcycles, but the facts were that Japanese products were/are far superior to US and British products."

In the 1960s it was probably warranted.  But, as we all know, things change... which is why blanket statements such as "never" (made by the person starting this thread) are a bad idea.

I've got a 1990 Toyota and if I had spare cash I'd buy a re-manufactured engine to have around for when the current one expires: maximizing the use of the embodied energy in it!  It's pretty bullet-proof (saw tons of them in service in Manila, which has to say something).  Decent fuel mileage.  I can work on it.  AND... NO PAYMENTS (lower insurance costs too).  But, I'm a cheap bastard, I've never purchased a new vehicle.

Parrotile's picture

Evidently far more people than buy even the "prestige, Look at ME!" brands.

Probably has a lot to do with better reliability backed with far better (e.g. 8 year) warranty - in comparison to Peugeot's 3 year "Standard" one (in Australia at least!). Lower servicing costs, and class-leading diesel economies using their in-house designed engines and transmissions which in the 6-speed auto version run rings around the "Best of German Engineering" ZF.

Maybe you need to compare the Kia CRDI Carnival Auto with say the Volks or Mercedes MPV - you'll soon realise why Kia are doing so very well, and will continue to take market share of the other lesser brands (which include most EU and USA Manufacturers, AND Toyota!).

Oh, and because idiots like you continue to believe the protectionist "Kia / Hyundai are cheap crap" mantra I enjoy quite a nice saving on insurance - after all who in their right mind would steal a Kia diesel MPV . . . . . .

rehypothecator's picture

The "Industry of Hope" is not industry at all.  It doesn't make anything, except perhaps a ephemeral zephyr of feeling in the minds of the participants.  All lotteries do is fund government, while randomly paying back some fraction of the ticket prices, in admittedly a rather lumpy way, to said participants.  No goods or services are created, and the payout is less than unity.  Wealth is most certainly not created. Lotteries are simply parasitic. But I can't speak too badly of them - at least they're voluntary.  

TSA gropee's picture

"The "Industry of Hope" is not industry at all." Since when does an industry need to make something? Service if I recall is an industry, and yet it doesn't make anything. Just sayin'...

Seer's picture

"All lotteries do is fund government"

Aren't there "private" lottos?  I know there are casinos, same same...

NOTE: EVERYTHING funds govt. about the only way to skimp is to go low-consumption and or barter; point being: instead of whining one can actually DO something about it.

laboratorymike's picture

Re: Barter: If you live in the USA you may want to check out Form 1099-B. Yes, you have to pay taxes on barter income too! At least on the legal market.

I do agree with the low-consumption part though. I'll need to go through my old files to see if I still have my old essays on what I called "non-contribution," which I'm thinking is the same idea that you have.

Seer's picture

Yes, thanks for making sure that the facts are out there.  I don't wish to mislead.

Lots of people (not me though) believe that barter is exempt from taxation.  Transactions are taxed, period :-(

A simple view of bartering:

lincolnsteffens's picture

You can exchange labor without incurring a "legalized" tax. No money and no goods

exchanged means no tax!  Support your local labor bank.

NotApplicable's picture

IRS (et al.) could give a shit about "legal," other than their own interpretation of it.

All of which, is subject to constant change, leaving you exposed to the whims of the black robes.

You're far better off considering the whole thing a criminal cartel, that way you'll know not to rely on its "truths."

The law aids us only so far as necessary to give the criminals the appearance of integrity.

laboratorymike's picture

I am not a tax expert, but my rudimentary understanding is that the IRS defines individual income as whatever "comes in." So technically, if your friend invites you to his barbecue and you get a couple hot dogs, that is income. This is not meant to tax free hot dogs though, since the enormity of paperwork would destroy everyone, the IRS was kind enough to have "de minimus" limits so that the office coffee doesn't require a 1099B.

However, this rather absurd definition does exist for a purpose, and that purpose is to pwn people who figure out how to live a barter-based existence and as a catch-all for anyone who takes cash or goods under the table. And since taxes are paid in dollars, it means one must get dollars in order to pay taxes, which is a big part of what forces the dollar's value as a fiat currency. If it was as simple as bartering, I think the stampede into barter-based "currencies" would be immediate and astounding.

FrankDrakman's picture

If you live in the USA you may want to check out Form 1099-B

Is that as bad as a Form 24B/6?

H E D G E H O G's picture

who the fuck would own/buy a car in French Fry Land if the damn thing was going to get burned by a group of unemployed, pissed off, youth once a year? me thinks Russian citizenship might not be a bad idea.<sarc on>

NotApplicable's picture

Once a year? Try every freaking night. NYE is the one night when they apparently ALL do it.

I'm surprised anyone without a garage can get insurance (or is that a gov op too?).

CheapBastard's picture

Wait until 'Spring Fever' sets in....


Clowns on Acid's picture

Broken window / burning car.....

Osmium's picture

People aren't buying Fiats?  I for one am shocked!  Shocked I tell you!

hairball48's picture

They need to ramp up those car burnings. Didn't the frogs see the fallout from Sandy? Destroying stuff is good for the economy. Replacing the destroyed stuff creates demand, more jobs, etc. etc. and I know it's true cause I heard it on CNBC, or maybe it was Krugman on CNN? /sarc

Seer's picture

"Replacing the destroyed stuff creates demand, more jobs, etc. etc."

Yeah, Christie seems to be struggling with this one, with getting his demands for $$s.

Clowns to the left, jokers to the right...

DonutBoy's picture

Burning cars - cash for clunkers - they're stimulus plans, bullish..