Car industry has to go green, says government

THE French government has outlined its support for the motoring industry, with a focus on 'clean' vehicles.

Following the news that Peugeot Citroen was to cut 8,000 jobs, Francois Hollande and in particular Arnaud Montebourg, the minister of productive recovery, said they would work with motoring chiefs to boost the industry.

Following a meeting today the government outlined those plans which include an increase in the sweetener for buyers of electric vehicles from €5,000 to €7,000 and from €2,000 to €4,000 for hybrid vehicles.

The government has stressed that this support will be withdrawn if manufacturers raise their prices.

Other parts of the plan include the government promising to shift some spending to purchasing electric and hybrid vehicles, as well as research and development support plus improved financing opportunities for manufacturers and suppliers.

On Wednesday morning Peugeot reported a loss of €819m for the first half of the year, with manufacturers struggling with the fact that the European car market has seen a 23% decline since 2007.

These measures from Francois Hollande's administration come on the back of similar steps undertaken by the Sarkozy government dating back to 2007.

This time it is hoped that the focus on electric and hybrid vehicles will propel the French car manufacturing industry forward and establish it as a world leader.