French supplier body, FIEV, is cautioning competitiveness is becoming a “real issue” for the country as the debate surrounding the so-called ‘delocalisation’ process heats up.

France’s automotive industry is having to confront some serious over-capacity and performance issues – particularly from an OEM standpoint – with the country’s two big beasts of the jungle – PSA Peugeot Citroen and Renault – calling for a radical reshaping of their business models with resultant union unease.

“What is important is there is a kind of shift to a sensitivity in terms of competitiveness,” FIEV vice president operating officer, Arnaud de David-Beauregard, told just-auto at this week’s CLEPA Aftermarket Conference in Brussels.

“Competitiveness is a real issue for the French economy. We need to do something in terms of cost and in terms of social protection, which is a huge burden. We need to do something about public employment, which somebody has to face.

“We have [been] helping and supporting on the practical side and the necessity to go international – to develop exports – to develop localistion outside France.”

French firms moving parts of their operations outside the Metropole have long irritated the country’s powerful unions, but there appears to be a head of steam building from business that is eyeing eroding margins and high European costs with increasing alarm.

But FIEV has taken a robustly positive view of companies such as Renault in Morocco for example as a way forward.

“We are delivering the message – please do that,” said David-Beauregard. “We have a significant number of suppliers who have been to Morocco and are develop [ing] there, we have a close connection with them.”

FIEV’s view is sure to exercise union minds already spooked by the announcement of large-scale job losses at PSA and Renault’s wish to implement radical restructuring on its home turf.

Into the fray has also stepped the French government, which has taken a keen interest in the automotive sector since its recent election, but whose pronouncements have left some in the industry baffled.

Only this week, French Economics Redevelopment Minister, Arnaud Montebourg, has been engaged in a furious war of words with Indian steel operator, Mittal, leading London Mayor, Boris Johnson, to echo FIEV’s localisation comments and encouraging French businesses to relocate to the UK.