President Emmanuel Macron has announced an €8bn plan to revive France’s motor industry, which has been crippled by the loss of sales and production during the coronavirus pandemic and the lockdowns aimed at slowing the spread of the disease.
The plan, announced on Tuesday, includes increased subsidies for buyers of electric and hybrid cars and support for research into hydrogen power and self-driving cars. It aims to ensure that the country’s automotive assemblers and suppliers survive the crisis and emerge in the years ahead as leading global manufacturers and exporters of clean vehicles.
Mr Macron said the aim was to “relocalise” manufacturing in France and “to make France the leading country in Europe for the production of clean vehicles”, with an output target of 1m a year by 2025.
He portrayed the recovery plan, which includes €5bn of aid for Renault, as a three-way bargain between the state, manufacturers and employees, with companies investing in production on French soil in exchange for government support.
PSA, owner of the Peugeot and Citroën brands, has undertaken to increase its output of clean cars from zero last year to 450,000 annually, while Renault will triple its production by 2022.
Renault, which is close to securing its credit line from the French state, will become the third partner alongside PSA and Total subsidiary Saft in a multibillion-euro project to produce batteries for electric vehicles within the EU; at present, most come from China and South Korea. The state owns just over 15 per cent of Renault.
Mr Macron, who has long championed European industrial “sovereignty” through investments in tech sectors dominated by Asian and US competitors, was speaking at the Etaples factory of motor industry supplier Valeo near Le Touquet in northern France.
He was accompanied by five of his ministers, including Bruno Le Maire, the finance minister, and Muriel Pénicaud, who has the labour portfolio.
Sales of cars fell drastically during France’s nationwide, two-month lockdown, which ended two weeks ago. Mr Macron said one aim of the subsidies, some of which can be used for efficient petrol or diesel vehicles, was to shift unsold cars produced in recent weeks, which are expected to number 500,000 by the end of this month. A family buying a new electric car can receive subsidies of up to €12,000 for the purchase.
Mr Macron said 200,000 motor industry employees were among the 8m workers still being paid through a government temporary unemployment scheme in which the state pays for the salaries of furloughed staff. Such measures are costing the state hundreds of millions of euros but “have prevented collapse” for companies, one official said.
The auto sector in France employs 400,000 people directly, a number that rises to almost 1m if associated services are included.
Mr Macron’s plan includes a €600m fund to take equity stakes in struggling suppliers and consolidate them to strengthen the industry as it retools and invests in automation; two-thirds of the fund will come from the state and the rest from the big French car groups.
France has also brought forward its target of having 100,000 electric vehicle public charging points across the country to next year, from 2022.
The plan comes at a moment of high tension for the French auto industry, with Renault set to announce a €2bn programme of cost-cuts on Friday. These could lead to plants being repurposed and some closed — including in Dieppe in northern France — with up to 5,000 jobs to be lost over the next four years.
The job cuts were first reported by French daily Le Figaro and confirmed by people familiar with the matter, who stressed that they will mostly be through the non-replacement of retiring workers. Renault declined to comment.
Additional reporting by David Keohane