France willing to help suppliers and manufacturers as diesel sales fall

28 February 2018

The French Government has suggested that it is willing to help vehicle manufacturers and suppliers that are struggling following the decline of the diesel market.

French finance minister Bruno Le Maire will meet with automotive industry leaders in April to discuss ways in which the government can offer aid to the diesel market in the country, with 12,000 jobs at risk should the lack of sales mean companies withdraw from the country.

France saw its diesel market share in new registrations fall below 50% for the first time since 2000, ending 2017 with 47% of new vehicle sales during the year. This, together with falling sales across Europe, has had a knock-on effect on demand for parts for vehicles powered by the technology.

Bosch has already announced it will seek talks with Le Maire over the future of its Rodez plant, which employs more than 1,600 people.

′I will make him [Denner] two requests: the first is that he makes a new investment on one of the two production lines, the second thing I’d like to obtain from him is a diversification of the activity,’ Le Maire said on the Europe 1 radio station.

Other French supplier factories at risk include a Delphi injector plant in Blois and a Honeywell Garrett turbocharger site in eastern France.

Speaking during a tour of PSA Group’s factory in Mulhouse, France, Le Maire said the government sought to “help large companies such as PSA manage the transformation toward gasoline, hybrids and electrification,” Agence-France Press reported.

Last autumn Le Maire announced the creation of a working group to address the diesel issue, even as he said that taxes on diesel fuel would be raised by 3 cents per litre, with the aim of reaching parity with gasoline taxes.

As well as parts supply, vehicle manufacturers are having to look at ways to increase production of petrol-powered vehicles, which is having financial implications. PSA is planning to import over 100,000 engines from its Chinese production facilities as a stopgap measure while it converts diesel plants to petrol in Europe, while Renault has increased production of petrol engines in its Spanish plants.

Meanwhile, other manufacturers are contemplating ending diesel production. Fiat Chrysler Automobiles is planning to do so from 2022, while Toyota and Porsche are also looking to phase out the technology. All of this will aid the transition to low-carbon vehicles in time for France’s ban on petrol and diesel only engines by 2040.