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Macron to announce relief plan for Covid-hit car industry

By Mike Woods - RFI
France REUTERSGonzalo Fuentes
MAY 26, 2020 LISTEN
REUTERS/Gonzalo Fuentes

French President Emmanuel Macron is to unveil a bailout package Tuesday for the country's automobile sector after the beating it took under the coronavirus lockdown.

After meeting carmakers and unions in his Paris office in the morning, Macron was to visit supplier Valeo, which makes equipment for electric cars, at its factory in Etaples in northern France.

Ahead of the visit, Macron tweeted that economic relief for France's automobile industry would be “massively amplified”.

“It's part of our company, it's thousands of jobs,” the president tweeted. 

Macron is expected to announce measures to boost production of electric vehicles and could detail incentives for consumers to buy battery-powered cars and to scrap old vehicles for lower-emissions models. 

France's auto industry, which includes brands like Peugeot-Citroen and Renault, employs 400,000 people in the country and represents a large part of its manufacturing sector. 

Carmaking factories drive economies of entire communities, though workers at many sites live in fear of closures as companies shift production abroad.

The government is under pressure to ensure carmakers commit to keep jobs in the country and Finance Minister Bruno Le Maire said Monday that companies would have to commit to bringing back manufacturing to France if they wanted support. 

Car sales dive under lockdown

The coronavirus pandemic has hurt car manufacturers around the world and France has been no exception, with confinement measures closing showrooms and prompting factories to suspend production. 

Car sales to individuals have fallen by nearly 89 per cent in France in April and 48 per cent since the start of the year compared with 2019, according to data published by carmakers' union CCFA. 

CCFA data showed similar trends around Europe, where sales to individuals were down 76.7 per cent in April and 38.6 per cent since January compared with last year. 

The trend was similar in all categories except in sales of electric and hybrid models, which despite the coronavirus crisis have climbed 81.7 per cent this year compared with 2019.

Renault's difficulties fuel fears over jobs

French carmakers received billions of euros in bailout funds after the financial crisis of 2008 and benefitted from government bonus plans that encouraged consumers to buy newer, cleaner cars.

But that did not prevent thousands of job cuts – and unions are concerned public money handed to companies will not automatically improve prospects for workers. 

One case in point is the difficult situation of Renault, whose alliance with Japan's Nissan and Mitsubishi has been on the rocks since the arrest of former CEO Carlos Ghosn on charges of financial misdeeds in November 2018.

The group reported its first losses in years in 2019 and unions said they have bene summoned to a meeting on Thursday on how the carmaker will cut 2 billion euros in costs.

The government is under pressure to preserve jobs following reports that Renault was planning to close four sites in France. 

Le Maire has said the carmaker's survival was at stake and that the government would not require it to keep all its French jobs and sites in exchange for rescue funds.

The French state is the largest stakeholder in the company with a 15 per cent share. It has been in talks over a 5 billion euro loan guarantee.

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