France to Support Auto Industry with 10.8 Trillion Won... "Let's Switch to Eco-Friendly Cars This Time"

Subsidies Available Now for Electric and Hybrid Purchases
Goal to Produce 1 Million Eco-Friendly Vehicles by 2025
Macron: "Let's Make France a Leader in Eco-Friendly Cars"

[Asia Economy Reporter Naju-seok] The French government has secured 8 billion euros (approximately 10.8 trillion KRW) in funding to support its domestic automobile industry, which has been hit hard by the novel coronavirus disease (COVID-19). In return, the government has demanded that the industry invest in electric vehicles and other eco-friendly car sectors, signaling its intention to use this as an opportunity for structural reform.

On the 26th (local time), French President Emmanuel Macron announced the French automobile industry support measures centered on this plan during a visit to the Valeo factory, an auto parts manufacturer located in ?taples in the north.

[Image source=EPA Yonhap News]

President Macron expressed concern, saying, "Compared to last year, car sales have dropped by 80%, and 400,000 produced vehicles are piled up around the factories." He added, "By the end of June, 500,000 vehicles will be stockpiled, which is an unprecedented situation." The core of the support measures is aimed at increasing automobile consumption. However, he also revealed an intention to enhance the competitiveness of the French automobile industry through this large-scale support. Consumers who purchase electric vehicles will receive 7,000 euros, and those who buy hybrid vehicles will receive 3,000 euros. There are no benefits for purchasing traditional internal combustion engine vehicles such as gasoline cars.

Regarding the goal of this plan, President Macron stated, "We will relocalize manufacturing production within France and make France a leading country in eco-friendly automobile production." He even set a target to produce 1 million eco-friendly vehicles in France by 2025.

Following this policy, PSA, which owns the Peugeot and Citro?n brands, plans to actively engage in eco-friendly vehicle production starting this year. Although the company had no record of producing electric or eco-friendly vehicles in France last year, it plans to increase production to about 450,000 units annually going forward. Renault has committed to tripling its eco-friendly vehicle production scale by 2022. Additionally, PSA and Saft, a subsidiary of the oil company Total, will participate in an EU-level electric vehicle battery project. The French government has also accelerated its schedule to install 100,000 charging stations by next year to promote electric vehicle adoption.

The measures also include a plan to purchase shares worth approximately 600 million euros to support auto parts companies and others. Two-thirds of the funds used for share purchases will be provided by the French government, with the remainder contributed by the automobile industry.

There are also criticisms that the timing of this announcement is delicate. President Macron said that the automobile industry support would be achieved through a tripartite agreement among the government, companies, and workers. However, according to local media, Renault plans to announce a cost-cutting plan worth 2 billion euros, including 5,000 job cuts over the next four years, on the 29th.

This content was produced with the assistance of AI translation services.