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As French motor industry runs on empty – French government plans new incentives to boost car sales in France

The French government will launch a new plan in mid-February to boost sales of new cars, similar to a programme that ended in 2009. This is in response to very weak December sales of cars in France, in particular for French manufacturers, who saw their sales decline significantly.

The announcement was made by Industry Minister Eric Besson who commented in a statement, "The government is on the side of the automotive industry and its employees to cope with a market that has temporary difficulties.”

In December 2011, new car registrations in France were 15% down on the same month the previous year at 226,885, according to a press release issued on Monday by the French association of car manufacturers. These figures disclosed that French carmakers had performed considerably worse than the general market trend. PSA Peugeot Citroën sold 29 percent less new cars whilst Renault saw sales fall by 28 percent.

The support of the French government is not new. Two years ago, the automobile industry introduced a scrappage scheme, sometimes known as ‘cash-for-clunkers’, to encourage sales of newer, more fuel efficient vehicles. The scheme was also available in the UK and the U.S.

The official explanation for that measure was that whereas older cars had more toxic emissions, newer and more fuel efficient cars would be better for the environment. The underlying reason was considered to be that this was a means of supporting motor manufacturers suffering poor sales as a result of the recession.

Earlier this week, in a cost-cutting measure Peugeot announced it was pulling out of endurance racing and France's Le Mans 24 Hour race.

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