Open

Coming up

Don't miss

Replay


LATEST SHOWS

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

FASHION

Jean-Marc Loubier, bags and shoes.

Read more

ENCORE!

Hip-hop musician Beat Assailant on mixing the sounds of the city

Read more

  • French journalists abducted in Syria freed

    Read more

  • South Korea ferry captain defends decision to delay evacuation

    Read more

  • Bouteflika, the ghost president

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Ukraine: ‘One bloody incident could scupper Geneva deal’

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • Indian election: Votes for sale

    Read more

  • World honours Garcia Marquez’s magical literary legacy

    Read more

  • Algeria's ailing Bouteflika clinches fourth term amid fraud claims

    Read more

  • Top Hollande adviser resigns over conflict of interest accusation

    Read more

  • West African Ebola outbreak caused by new strain of virus

    Read more

  • Video: Tensions remain high in Mariupol despite Geneva deal

    Read more

  • In Prijedor, survivors fight to keep memory alive

    Read more

  • With a strong French presence, veterans and fresh faces, Cannes aims to please

    Read more

  • Mob launches deadly attack on UN shelter for S. Sudan civilians

    Read more

  • Eurostar train mishap causes 'severe' delays

    Read more

  • French troops free five aid workers kidnapped in Mali by Islamists

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

  • Belgian head of wildlife reserve shot in DR Congo

    Read more

  • Stagehand of God? Maradona's legendary goal inspires a play

    Read more

France

France hopes going green will boost auto industry

©

Video by Katharyn GILLAM

Text by News Wires

Latest update : 2012-07-25

France will unveil plans to boost support for environmentally sound cars Wednesday as part of a strategy to aid the country's struggling carmakers. Industry giant PSA Peugeot Citroen has reported €819 million in losses for the first half of the year.

AFP - France will boost support for environmentally friendly cars as part of a recovery plan to be unveiled Wednesday amid growing concern for the country's crisis-hit auto industry and top carmaker Peugeot.

Highlighting the difficulties facing the French auto sector, PSA Peugeot Citroen announced Wednesday it had suffered a first half net loss of 819 million euros ($989 million), more than reversing a year-earlier net profit of 806 million euros.

The recovery plan, which was to be presented Wednesday and parts of which were seen by AFP, includes a range of measures to boost cleaner vehicles amid hopes French carmakers can carve out a niche in the market.

But it also contains hints of protectionism, with France planning to ask the European Union to put its 2010 Free Trade Agreement with South Korea under surveillance to "defend the interests of the French automobile industry."

The plan will boost consumer bonuses for purchasing electric cars from 5,000 euros to 7,000 euros and for hybrids from 2,000 euros to 4,000 euros.

It will see the government commit to 25 percent of its new vehicles being electric or hybrid and provide for financing facilities for manufacturers and suppliers suffering from a major drop in European car sales.

Prime Minister Jean-Marc Ayrault said the government had chosen to "go on the offensive" with the plan, which he said was "extremely ambitious".

"This is part of our very great determination to see the automotive industry recover, this is an extremely important act," he said.

Peugeot, France's biggest carmaker and the second-largest in Europe, had been expected to announce a first-half net loss but the final figure was more than double analysts' expectations.

Peugeot said overall revenues were down 5.1 percent in the first half to 29.6 billion euros while the auto division alone suffered a net loss of 662 million euros. Sales in Europe fell 15.2 percent.

The company, which has already announced 8,000 job cuts in France, said it will implement a 1.5-billion-euro cost reduction plan through to 2015.

The cost-cutting plan will include 600 million euros in savings from reorganising French production, which includes the job cuts, reductions in capital spending and savings from a tie-up with US giant General Motors.

"The group is facing difficult times," Peugeot chief Philippe Varin said.

"The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganisation of our French production base and a reduction in our structural costs," he said.

After the results, agency Fitch said it was lowering its rating on Peugeot's long-term debt by one notch to BB, with a negative outlook.

President Francois Hollande's new Socialist government has attacked Peugeot's strategy and called the job cuts "unacceptable."

The cuts announcement sparked anger among France's powerful unions and dealt a blow to Hollande's efforts to get the economy back on track amid concerns the country might be heading for a recession after an expected contraction in the second quarter.

Peugeot, which employs 100,000 people in France, is a key symbol of the country's industry and its problems highlight France's difficulty in competing with rivals with lower labour costs.

Hollande's government has lashed out at Peugeot over the cuts, with Minister for Industrial Renewal Arnaud Montebourg saying he had a "real problem" with the company's strategy and did not have confidence in its management.

Company Chairman Thierry Peugeot said last week the attacks have put PSA in a "dangerous" position and France's right-wing opposition has accused the government of creating a toxic business atmosphere that threatens the economy.

About 593,000 people are directly employed in automobile production in France.

At least 1,000 Peugeot employees protested outside the company's headquarters on Wednesday including many from the company's historic Aulnay plant near Paris that is due to cease production.

"We're angry," said Jean-Pierre Girard, who has worked for Peugeot for 35 years. "It is shameful to close a plant and leave employees in the lurch after so much good and loyal service."
 

Date created : 2012-07-25

  • AUTO INDUSTRY

    Peugeot sees net loss of €819 million in first half 2012

    Read more

  • FRANCE

    Workers face 'disaster' at doomed Paris Peugeot plant

    Read more

Comments

COMMENT(S)