France to focus aid on greener auto sector after virus

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PARIS (Reuters) – France seeks to boost sales of low-emission cars as part of a support plan to be announced over the next two weeks for an industry hard hit by coronavirus blockages, said Monday on Minister of Finance Bruno Le Maire.

FILE PHOTO: The Renault logo is visible at the Renault car factory in Flins as the French manufacturer accelerates car production with new safety and health measures during the coronavirus epidemic (COVID-19) in France , May 6, 2020. / Photo taken on November 26, 2018 / REUTERS / Gonzalo Fuentes

Certain car manufacturers, including Renault (France) (RENA.PA) and PSA (PEUP.PA), the group behind Peugeot, begins to reopen its factories after closures to control the spread of the new coronavirus.

But demand was already weak even before the impact of the pandemic, which exacerbated the financial difficulties of companies and their suppliers.

The mayor, who met with leaders of the automotive industry on Friday, told France Info Radio that the government intends to use any support program or scrappage program to encourage a transition to less polluting vehicles.

“I will announce a support plan … to boost consumption, to support this transformation towards a more sustainable model, with special support for cars that emit the least CO2,” said Le Maire.

Electric vehicles are too expensive for many households, Le Maire said, without giving further details on the types of measures envisaged and whether they would include direct state support for certain companies.

The Mayor said the French government also hopes to announce a plan to help the country’s aviation sector by July 1.

France has deployed state-backed bailouts and loans for other sectors affected by the pandemic, and has again sought to combine environmental conditions.

In particular, it asked the airline Air France KLM (AIRF.PA) reduce carbon emissions and domestic flights.

In the automotive industry, Renault is particularly targeted. After registering its first loss in a decade last year before the pandemic, it is the first in the industry to obtain a state-supported loan, which is expected to amount to around € 5 billion, previously declared The Mayor.

Some providers have found it difficult to exploit state aid schemes, which are channeled through commercial banks. Novares, which manufactures plastic components for cars, was placed in temporary receivership in late April after failing to reach a quick deal with its lenders to resolve a cash crisis.

Report by Sudip Kar-Gupta and Leigh Thomas; Writing by Sarah White; Editing by Catherine Evans and Barbara Lewis

Our standards:Principles of the Thomson Reuters Trust.

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