French President Nicolas Sarkozy has announced an EUR1.5bn boost, including a scrappage incentive, for France’s auto industry as part of a package of measures designed to shore up France’s weak economy.
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“The state is prepared to do everything to save the car industry, which employs 10% of the French workforce,” the president said.
To help car makers shift unsold stocks of close to a million vehicles, owners who scrap an old vehicle to buy an energy-efficient new one will receive a 1,000-euro bonus, a measure forecast to cost 220 million euros. The incentive applies to cars with a CO2 rating of less than 160g/km.
The French state will also provide a one-billion-euro loan facility to support the financial services branches of Renault and Peugeot.
France will also set up an EUR300m fund to support an industrial restructuring in the sector, a third of which would be financed by the state.
Sarkozy made it clear that he does not want French automakers to be disadvantaged if the US helps its automakers.
“I believe in globalisation, I believe in free trade. But if our American friends were to do more to for their own industry, I would not let French carmakers suffer a competitive disadvantage,” he said.
