The auto industry of France will receive an $8.8 billion aid package from the government to help it recover from the impacts of the coronavirus pandemic.
President Emmanuel Macron announced that France will be infusing $8.8 billion into its auto industry to help alleviate the effects of the coronavirus pandemic, including the recent dramatic decline in sales.
The aid package was discussed by the president during a visit to a Valeo factory for electric car parts in Northern France.
Declining Auto Sales
According to President Macron, approximately 400,000 cars remain unsold and are currently sitting in factories and parking lots. This represents an 80% decline in sales compared to the same period last year.
He said: "By the end of June, we will probably be at around 500,000 unsold vehicles compared to the previous season. This is unprecedented for this sector, which represents nearly 16% of our industry's sales."
"Roughly 4,000 companies and 400,000 employees [are affected by this pandemic], and nearly double that if you take into account production and services," the French president added.
The Bailout Package
As part of the aid package, the government plans to heavily incentivize consumers into buying new cars by providing subsidies amounting to over $7,000 off electric vehicles and $2,000 for hybrid cars.
Macron hopes that the move would push consumers back into dealerships and boost consumption.
Additionally, the government bailout is aimed at making the auto industry greener by turning France into the biggest electric car producer in Europe over the next few years. Some of funds will be directed towards the modernization of production lines.
In exchange for the bailout, the government expects French automakers to keep their production lines in the country and even bring back some production, particularly environmentally friendly technology.
French carmaker Renault will benefit greatly from the bailout as it has been greatly affected by the pandemic, which forced its factories in the country to all shut down mid-March. The company is expected to announce cost-cutting measures this week which could save the firm €2 billion.
UK's Aston Martin shakes up executive team
In other news, British luxury carmaker Aston Martin announced that its chief executive officer (CEO) Andy Palmer has stepped down following a 94% fall in the company’s share price.
Palmer will be temporarily replaced by Keith Stanton, head of Aston Martin’s manufacturing unit. By August 1, Tobias Moers, the current chief executive of Mercedes’ high-performance subsidiary AMG, will take over the position.
In a statement, Aston Martin executive chairman Lawrence Stroll said: "The board has determined that now is the time for new leadership to deliver our plans."
According to Palmer, it had been "a privilege" to work at Aston Martin for almost six years. He expressed his gratitude to the management and staff for "their hard work and support, particularly during the challenges presented by Covid-19".
The management shakeup comes several months after Canadian billionaire Stroll took over as chairman of Aston Martin. He invested $653 million in cash to rescue the company.
The automaker also announced that three of its directors, namely Richard Solomons, Imelda Walsh and Tensie Whelan, have vacated their posts and expressed that they will not seek re-election in June.
