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Peugeot Welcomes EV Subsidies and 'Fabrique en France' Campaign
Green Technology Featured Articles
August 06, 2012

Peugeot Welcomes EV Subsidies and 'Fabrique en France' Campaign

By Cheryl Kaften
TMCnet Contributor

French carmaker PSA Peugeot Citroen – which last week announced a 15.2 percent drop in European sales during the first half of 2012, resulting in a net loss of €662 million (US $821 million) — has announced that it “welcomes” a recovery plan unveiled on August 1 by French Industrial Recovery Minister Arnaud Montebourg at a press conference in Paris.


The plan will drive consumer and government purchases of “green” electric and hybrid vehicles, provide funding for factory upgrades, encourage use of domestic content, and offer support to small businesses.

PSA Peugeot Citroen, which is Europe's second biggest carmaker, has been forced to cut 8,000 jobs in France and to close its Aulnay plant near Paris under a cost-reduction program aimed at saving €1.5 billion (US $1.86 billion) by 2015.

"The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganization of our French production base and a reduction in our structural costs," PSA Chief Executive Philippe Varin said when he released the company results last week.

In a formal statement following the press conference on the government plan, PSA Peugeot Citroen commented, ″The plan will help the industry to regain its competitiveness, which is indispensable in a European market that is enduringly declining.″

The automaker identified the following elements of the government initiative as particularly important:

·          Development of clean vehicles, through support for innovative solutions or for the purchase of affordable, environmentally responsible vehicles (powered by low-carbon internal combustion engines, as well as hybrids and EVs);

·          State financing for the small and medium enterprises (SMEs) that play such a critical role in the industry, as well as greater involvement by OSEO, France’s small-business financing organization; and

·          Expansion of the responsibilities of the Automobile Platform, as the coordinator of various industry stakeholders , to make it possible to work together to define priority objectives in terms of R&D and industry consolidation.

 

 French Industrial Recovery Minister Arnaud Montebourg at press conference. 



Details of the plan

Specifically, under the new initiative, the French government is set to earmark €350 million (US$424 million) in subsidies for consumer purchases of electric and hybrid cars, as well as another €450 million (US$585 million) to help auto equipment makers to modernize their industrial plants, according to German broadcaster Deutsche Welle (News - Alert) (DW).

The maximum state subsidy for the purchase of an electric car would be increased from €5,000 (US$ 6,190) to  €7,000 (US $8,960), French Industrial Recovery Minister Arnaud Montebourg told a news conference in Paris.

In addition, subsidies for buying a hybrid car would be doubled to €4,000 (US$4,964), said Montebourg, adding that the aim of the plan was to increase sales of the two types of cars to 25 percent of new registrations.

In return for the direct aid to the French car industry, Paris demanded that automakers retain industrial sites, as well as research and development facilities in France.  A new advertising campaign will promote automobile models that are “Made in France.”

Describing the objectives as "extremely ambitious," France's Prime Minister Jean-Marc Ayrault said that the plan was part of "our very great determination to see the automotive industry recover."

The government said the decline of France's auto industry has been particularly egregious; the country produced just 2.2 million cars last year, as compared to 2005's 3.5 million. Today, the industry employs 800,000 people — 30 percent fewer people than it did 10 years ago.

"France isn't abandoning its automotive industry," promised Prime Minister Ayrault. 

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Edited by Allison Boccamazzo


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