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.
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By GlobalDataSarkozy 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.
