- €8B Bailout Package will be focussed mainly on Electric Cars.
- This is in addition to the €5B relief package to Renault & other companies.
- Auto Sector is the French economy’s one of the largest contributor.
President Emmanuel Macron announced €8B or $8.8B bailout package to French Auto industry.It has been facing one of the worst phase because of the global lockdown forced by Covid-19 pandemic.French auto industry has been the global automobile leader once & the French President is using this phase to revive the industry once again.His focus his mainly on making the French Auto,Electric Cars leader.He said,
And gave emphasis on making France the leading Clean cars (Esp. Electric) manufacturer in Europe.
This was in addition to other packages :
This package covers up the entire Auto Industry, especially to bolster the Electric car industry.The package is in addition to previous €5B relief guarantee to Renault & other aides meant to the temporary unemployment of auto workers due to the Covid-19 lockdown.
The decision of this bailout relief came after the meeting of the representatives & union member of Auto industry with Macron at President Palace in Paris & his subsequent visit to Valeo;an electronic vehicle parts supplier
The French Govt will be expected to provide following aides :
- Subsidies to the customers buying ‘Electric or Battery Operated Cars’
- Incentives on scrapping old vehicles to purchase new low emission vehicles.
This is like a boon for staggering French Auto Industry :
The French President’s announcement of ‘€8B Bailout Package’ came in a time when Renault is facing plunge in its sales after the arrest of its CEO in 2018.The sales of the other car Co’s also fall steeply because of the shutdown of the showrooms. Approx 90% fall reported in sales in April compared to last year.
French Govt’s Involvement In Auto Industry :
French Finance Minister Le Maire also asserted that the primary focus of the Auto industry will be to bring back the employment to France.He also said about Renault,in which French Govt is holding 15% equity,that their survival is at stake & would not demand any exchange favor in return,as the probable chances of layoffs & factory shutoff will take place. These decisions will give the economic stability to the company.
Further,announcement of merger of Renault & Nissan will also leave the trail of factories to be closed in France. Another merger of PSA & Italian Fiat Chrysler will soon going to take place,govt holds 12% assets in PSA.
There is no more time to lose if we are to prevent a tsunami of job losses from sweeping through communities this summerSteve Turner of Unite Union
Other Countries are also focused on the revival of their Auto Industry like USA,Britain,Germany but because of opposition & hindrances within the govt & previous capital investments,it is being convoluted.
Indian Context :
It should also be noted that Society of Indian Automobile Manufacturers (SIAM) has been demanding such bailout package to revive the Indian Auto Industry since long.Moreover,Indian Auto Industry is facing the double heat because of the Covid-19 pandemic as the industry was already going through the worst phase.Indian auto sector has seen the worst growth & unemployment figures in the last financial year & now Covid-19 has added to its sufferings.The French Govt’s €8B Bailout Package is really the motivation for the other govt’s to revive their industries which are going through the worst phase of the decade.
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