More Support for the French Automakers

When private businesses fail, run out of money, the government takes the limelight... As we reported earlier, French auto industry is not doing good at all and, for the moment, the government is the only one that could help it get out of the doomed crisis.

Just-auto.com (via Le Figaro) announced today that the French government might provide further support to its automotive industry. Nothing is yet official, but president Nicolas Sarkozy is expected to come up with an announcement tomorrow.

After a meeting with the automotive leaders on Tuesday, it seems that the French ministers are all aware of the crisis its auto industry is going through so they have shown their desire to offer low cost interest loans to the car makers. More importantly, the government is also taking into consideration capital support for Renault, but the European Union needs to approve this first.

As a matter of fact, the French government has already approved an aid package of 1.5 billion euros last month. In addition, the package included an incentive to help car makers sell their stocks of close to 1 million vehicles.

Thus, owners who want to get rid of their old vehicle and buy an energy-efficient one instead will get 1,000 euros bonus. This measure won't be cheap at all for the government as it is predicted to cost about 220 million euros. However, not everyone will benefit from this incentive because the law applies only to cars with CO2 emissions under 160 g/km.