The French government has announced it is to increase subsidies for electric and hybrid vehicles, as the country works to kick-start its weakening car industry.
Grants for electric cars will increase from €5,000 to €7,000 and up to €4,000 for hybrid vehicles, increased from €2,000 and benefitting both private buyers and company car customers.
The new subsidies revealed as part of a new ‘Automotive Plan‘will be available until the end of the year, when the Government will consider extending them into 2013.
News of the extended support for low emission vehicles follows an announcement from the country’s biggest car firm, PSA Peugeot Citroen, that it is to cut up to 8,000 jobs in France and close its plant in Aulnay near Paris. Revealing record losses €819 million in the first half of this year, PSA welcomed the subsidies. As the first car company in the world to start producing diesel hybrids, the firm said in a press statement that the support would help the country’s car industry ‘regain its competitiveness’.
To practice what it preaches, the French Government also announced that 25 per cent of its new cars would be electric or hybrid.
The crisis in the country’s car industry provides a first major test for President Francois Hollande and his two month old government. Employment in France’s car industry has declined some 30 per cent in the last ten years, he acknowledged as he revealed the new plan.
France’s other major car firm, Renault also greeted the new subsidies. As the country’s leading producer of electric cars, the new Automotive Plan should provide a welcome boost.
Commenting, Carlos Ghosn, Chairman and CEO of Renault and the Renault-Nissan Alliance, said: “Renault welcomes the government’s determination to support the French automotive industry. The Group is especially pleased with the strong gesture made in favour of clean vehicles, and electric vehicles in particular.”
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