NOVEMBER 27, 2006
French government to help out France's car industry?
Renault may be doing well in F1 and Citroen in the World Rally Championship but both Renault and PSA Peugeot Citroen are suffering from falling sales and this is creating worries for the companies and for France. This is now getting to the point at which Prime Minister Dominique de Villepin has had talks with Renault and PSA Peugeot Citroen bosses in preparation for a new plan to help the companies involved - and their suppliers. De Villepin had a meeting also with 10 automotive suppliers.
With European laws being as they are, direct assistance is going to cause trouble but the government could use schemes such as the "Prime Balladur" in the 1990s when the French government paid car owners to trade in cars that were more than eight years old and replace them with new models. This improved the environment, made the cars safer and sold more cars. There are also possible tax incentives on different fuels - notably biodiesel - which could boost sales.
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