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French Government Steps In For Car Industry

  • December 17th, 2008
  • Posted by Daniel Challis

French President Nicolas Sarkozy has asked his Industry Minister Luc Chatel to formulate a plan by the end of the month to revive France’s struggling car industry.


Sarkozy met with car executives on Monday at the Elysee Palace to talk about one of the hardest hit industries affected by the global economic slowdown…


Peugeot, Citroen and Renault have all been going through a dramatic collapse in sales, leading them to cut production, lay off workers and close down factories in France in the past few weeks.

Elsewhere in Europe, Seat and Volvo became the latest to announce temporary production halts.

The European Automobile Manufacturers Association (ACEA) says consumers across the board are  buying fewer cars.
It said yesterday (16.12.08) new passenger car registrations had fallen 25.8% in November, against the same month last year.

They said it was the biggest fall since 1999 and registrations had been steadily declining over a seventh month period.

Ireland was one of the worst hit, with a 55.9% fall in car sales; sales were down 49.6% in Spain.

Peugeot-Citroen had a 26.9% fall in November; Renault dropped 21.8%.

The ACEA is seeking a €40 billion ($A80.45-billion;, 17.12.08) rescue package from the European Commission due to the ongoing decline in car sales.


President Sarkozy said on Monday that the government was prepared to take decisive action to rescue the country’s automobile industry in the form of loans and guarantees to car manufacturers.

A €300 million ($A603.38 million) restructuring fund for the French car industry was announced earlier this month, along with a €1000 ($A2011) bonus for customers getting rid of their old vehicles and buying an energy efficient one.

The government will also provide a €1 billion ($A1.5 billion) loan facility to support PSA (Peugeot Citroen) and Renault.

Sarkozy has repeatedly said France will not let its car industry become another victim of the economic crisis sweeping across Europe.

The Industry Minister, Luc Chatel, told reporters after Monday’s high-level meeting more long-term and systematic remedies were called for.

France needed an in-depth study of the automobile sector and “its structure, investment strategy, support for the supply chain and priorities in terms of research and development.”

However, the head of Renault, Carlos Gohsn told the daily Le Figaro the automobile industry was still heading for tough times despite support, and may need emergency government ‘soft’ loans to survive the crisis.

“What we are demanding from the state is some reasonable financing, over two to three years, at interest rates between four and five percent,” he said.


AFP, “Sarkozy moves to help Frances struggling car industry”,, (15.12.08)

European Automobile Manufacturers Association (ACEA), “Passenger Cars: New registrations down 25.8% in November”,, (16.12.08)

Deutsche Welle, “Economic Crisis Hits European Carmakers”,, (16.12.08)

Picture: Renault car factory, France