Increases will be valid up to end-2012; country to install more charging stations
The French government is increasing subsidies for hybrids and electric vehicles (EVs), reports Just-auto. The announcement came at an official meeting in Paris on Wednesday (25 July). Subsidies for EVs will be increased from EUR 5,000 (USD 6,050) to EUR 7,000 (USD 8,475) and by a maximum of EUR 4,000 (USD 4,843) for hybrid vehicles. However, these subsidies will be available up to the end of this year as it would be reviewed again with the French budget proposals in 2013. France's Economics Minister's Office, in an email to Just-auto, said, "These increases will be valid up to the end of 2012...the State will lead the way with 25% of new cars being either electric or hybrid, while every new urban vehicle will be electric." The office also informed that the state will increase the implementation of recharging stations for EVs and hybrids.
Prior to this announcement, Les Echos, the local news daily reported that subsidies will also be increased for low-emissions vehicles by between EUR 100 (USD 121.1) and EUR 150 (USD 181.6). The newspaper also said that the French state and the publicly owned bank for small and medium-sized companies, Oseo, will make EUR600m (USD 726.4m) available to businesses in this sector for investment and day-to-day cash needs. However, these developments are yet to be confirmed. Agence France-Presse (AFP) has also reported that the government will put the free trade agreement between South Korea and the European Union (EU) under surveillance.
Significance: Higher subsidies on hybrids, EVs and low-carbon vehicles can bring some revival in sales in the French auto market, especially when uptake of such vehicles in the country has been rather lukewarm so far. With French automakers coming under pressure from the retreat in the French market, in turn having a knock-on effect on component suppliers and other businesses in this sector, the government has decided to come to its aid. The statement sent to Just-auto also said, "The PSA Goupe has just announced large job cuts - a real shock for our country. There is a real urgency to take the right measures so the auto sector can bounce back." The email also talked about 30% decline in employment in the automotive sector in the past ten years and also the country is expected to produce two million vehicles this year in comparison to 3.5 million vehicles in 2005. However, whether or not the measures will persuade PSA Peugeot-Citroën to shut its plant in Aulnay (France) and lay off 8,000 employees remains a question.