France Decides to Promote More Green Cars to Save Automotive Industry

With France’s largest auto manufacturer, PSA Peugeot Citroen, posting record losses and cutting jobs, the local Government reacted to the present crisis in the automotive sector by revealing a host of measures targeted at promoting more green cars.

The French Government bodies went on to the green offensive to restore its present crisis-hit car industry with a range of measures that are actually aimed at encouraging the production of more and more environmental friendly vehicles. With the nation’s largest maker disclosing a record 1^st half loss of nearly €819 million, the latest measures by the government could not surface at a much better time.

PSA Peugeot Citroen Motors, which is also second largest automaker in the European market, has already declared nearly 8,000 job reductions in France only as part of the recent much-criticized cost reduction strategy worth around €1.5 billion over the coming 3 years.

Gambling on “Green”

The government’s strategies are nothing but a gamble that the auto industry’s future lies in hybrid and all-electric vehicles – with its latest measures an effort to make eco-friendly greener cars even more attractive to customers, and to improve the industry in the nation for the worldwide market.

Jean-Marc Ayrault, the honorable French PM (Prime Minister) said that the present government is quite determined to see the auto sector recover quickly, and he calls the new plans as “extremely ambitious”. The new measures include increasing the subsidies on purchasing of electric vehicles starting from €5,000 to a highest €7,000 Euros, and from nearly €2,000 to €4,000 in case of hybrid models.

These subsidies are planned to support manufacturers balance the greater cost of more eco-friendly vehicles, and therefore make both EVs and hybrid models more competitive. In reverse, prevailing penalties for severely polluting vehicles will be increased.

Declaring the new measures, Arnaud Montebourg, Minister for Industrial Renewal, French, said that twenty five percent of all cars purchased by the government would also be hybrid or electric now. Investment credits are also expected to be expanded for the industry under the latest plans.

The new measures have been terminated as uncertain by several auto industry insiders bearing in mind the scale of the problems in the sector. The Head of Didaxis, Guillaume Cairou told that the actual problem with the nation’s auto industry is the great cost of labor. He added that the government’s new strategy is piecemeal, which does not really work out in the long-term, and also it is not what the present industry needs.