France on green ‘offensive’ to save auto industry

With France’s biggest car manufacturer, PSA Peugeot Citroen, cutting some 8,000 jobs and posting a record first-half loss of €819 million, the French government responded to the crisis in the auto sector Wednesday by unveiling a raft of measures aimed at promoting green cars.

The government’s policies are a gamble that the future of the auto industry lies in all-electric and hybrid vehicles – with its new measures an attempt to make greener cars more attractive to consumers and to develop the industry in France for the global market.

“This government is determined to see the automotive industry recover,” said French Prime Minister Jean-Marc Ayrault, who called the plans “extremely ambitious”.

Measures include raising the subsidies on buying electric cars from €5,000 to a maximum €7,000 euros, and from €2,000 to €4,000 for hybrids.

These subsidies are designed to help manufacturers offset the higher cost of more environmentally friendly cars and thus make them more competitive. Inversely, existing penalties for heavily polluting cars will be increased.