French carmakers bank on green tech

Green technology is the answer to the declining fortunes of France's auto industry, according to a new government plan to turn the sector around, writes Oregon Live.

The strategy for France's carmakers was unveiled last week by the Ministry for Industrial Recovery - a government department created by President Francois Hollande to put his plan to “re-industrialise' France into action.

Across Europe, lots and factories are filling up with unsold cars. Industry executives estimate factories have the capacity to build 20% more cars than they are able to sell. Sweden's Volvo and Germany's Daimler both said this week that their profits dropped in the second quarter.

Peugeot-Citro"en has just revealed a loss for the first half of the year and plans to slash 8 000 jobs and mothball a French plant this month, Torque News reports.

This news led the Ministry for Industrial Recovery to unveil green technology as the path to brighter days for France's auto industry.

According to The Washington Post, the main part of the government's plan is to increase the rebates French consumers receive for buying an electric or hybrid car - no matter who makes it. The government estimates that it expects to pay out around EUR500 million ($600 million) in such rebates next year.

Several hundred millions of euros of incentives will also be offered to carmakers and their suppliers, especially small companies, that invest in green technology or create new jobs, Montebourg said. Much of the money for those incentives comes from funds already budgeted that are being redeployed.