New car: the State feared a decline in sales and help the industry

The automotive industry French must prepare for a “significant decline” in sales in the end of the year, recognized by the government, who prefer to take the lead in providing new aid to cushion the shock to the sub-contractors in the sector.

For the first time, the accumulated sales since the beginning of the year fell in October in their level of those of the same period of 2009. The decline in the market automobile French is 1%, according to figures revealed to the AFP on Sunday by the minister of Industry Christian Estrosi.

“We will be on the global since the beginning of the year, in sales, to -1% at the end of October, compared to 2009,” said Mr Estrosi, to the AFP, anticipating a few days of the publication of the official figures of the numbers expected on Tuesday.

The Committee of French manufacturers of automobiles (CCFA), which publishes every month the numbers of registrations, table on 2 million car sales this year, up from 2.3 million last year, where they had been historically high, thanks to the scrapping premium. But since the amount of the premium was gradually reduced and it will disappear on December 31.

The action by the government has favoured small cars low-polluting, a sector where the French manufacturers is excellent.

“The brands French is 55%, therefore the year 2010 is an excellent year for the French automotive industry”, stressed the minister, who also welcomed the rebound in auto production and a drop in partial unemployment in the industry.

But the sector is not out of the crisis, as evidenced by a circular sent to prefects, dated October 25, of which AFP has obtained a copy.

This post co-authored by Mr. Estrosi, minister of the Economy Christine Lagarde and the secretary of State for Employment Laurent Wauquiez calls the prefects to put in place an action plan for the sector, to “unify efforts and increase the effectiveness” of the measures already existing.

Since 2008, the government has taken a series of measures to support automotive manufacturers and their sub-contractors.

This has now been strengthened by an amendment to the charter sector assistance put in place in July 2008, said Mr Estrosi.

This endorsement has “the objective of contributing to the overall support and fast SMES to overcome the difficulties related to the automotive industry crisis”, explained the minister. Its financial component is 10 million euros.

In addition, the modernization Fund of automotive suppliers, founded in early 2009, has yet to 390 million euros on a total budget of almost 600 million, according to the minister. These monies may therefore be used in the event of difficulties.

In fact, the automobile sector “should again be severely affected,” according to the circular sent to the prefects. “The european car market, particularly in France, should be aware of a degradation, with a significant decline in sales expected in the second half of 2010,” stresses the letter.

“This situation is likely to continue at least until the end of the first quarter of 2011, where the european market should return to growth”.

Regarding automotive production, “after the strong increase observed in the last year, the decline should also be important and focused on the end of the year and the beginning of 2011, particularly in France, whose production, unlike Germany, is almost exclusively dedicated to the european market,” says the circular.

Accordingly, the restructuring and cash-flow problems related to the decline of the business “will threaten not only jobs but also the companies themselves”.

The sectors in the first line are “the stamping, the sector of moulds and models, and the plastics industry”, it adds.

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