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Beleaguered French automakers get €8bn funding package

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The French Government has announced an €8bn (£7.1bn) funding package for its domestic car industry as manufacturers struggle to maintain financial viability amid the coronavirus pandemic.

Production in the country has plunged by 90 per cent since the introduction of lockdowns and social-distancing policies.

The money is aimed squarely at making France a leader in next-generation electric vehicles, as President Emmanuel Macron pushes for a swift move away from internal combustion engine (ICE) cars.

Starting next week, consumers can get up to €12,000 from the French government for buying an electric car.

To help dealerships sell the 400,000 vehicles left unsold because of the lockdown, Macron said people buying a traditional car would also receive a €3,000 bonus under a scheme that would apply to three-quarters of households.

“Our fellow citizens need to buy more vehicles and in particular clean ones. Not in two, five or 10 years: now,” Macron said, following a visit to a Valeo car parts factory in northern France.

“Our country wouldn’t be the same without its great brands – Renault, Peugeot, Citroen,” he added.

Car-makers and governments around the world are grappling with similar losses. UK car manufacturing saw a 41.8 per cent fall in March, with just 5,219 units leaving production lines and an estimated £8bn fall in revenue.

This was on top of a 20 per cent fall in sales last year as a result of Britain’s exit from the EU, which left manufacturers uncertain about the specifics of future trade agreements.

Macron’s plan does not include a €5bn French Government loan guarantee under discussion for struggling Renault or the millions already spent on temporary unemployment payments to workers told to stay home for weeks to keep the virus at bay.

Macron set a goal of producing one million electric cars in France by 2025.

“Our country should embody this avant-garde,” he said. “We need not only to save (the industry), but transform it.”

Renault, which produces its Zoe electric model in France, has now pledged to make a future Renault-Nissan electric engine in France and not in Asia, as initially envisaged, he said.

A report in April suggested that the UK should wholeheartedly embrace connected and autonomous vehicles, as it is estimated that they could generate a £62bn economic boost by 2030.

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