- 2025-10-23
The French automotive industry is at a "life-and-death" crossroads.
[Translated by Lü Ou from Europe Times] "A profound and long-lasting crisis" "Facing collapse" "Risk of extinction"... A report from the French Senate used these keywords to depict the pessimistic outlook for the development of the French automotive industry and proposed nearly twenty specific measures to save the industry, in order to prevent France from becoming a mere "consumer country" of automobiles.
The "pillar of industry" in France is in deep trouble
Senator Alain Cadec from the right-wing Republican Party said: "If no measures are taken, we will head towards collapse." He is worried that the automotive industry, which provides about 800,000 jobs in France (about 350,000 in the manufacturing sector and about 450,000 in the parts supply and subcontracting sector), will follow the footsteps of the steel industry.
The report listed many problems of the French automotive industry: After the pandemic, passenger car sales dropped by 20% (compared with the previous five years), the share of automotive production in Europe decreased by 12 percentage points, and the automotive industry suffered severe damage under the erosion of the "twenty-year industrial transfer".
The chairperson of the Senate's Economic Affairs Committee, Dominique Estrosi Sassone (Republican), emphasized that the automotive industry has always been regarded as "the backbone of French industry".
At the time this report was published, French automotive giant Stellantis announced that it would shut down several factories for several days, involving Poissy, Sochaux and Mulhouse. Previously, the group also announced similar production suspension measures in some plants in Germany, Spain, Poland and Italy. This European's second-largest automaker with brands such as Citroën, Fiat, Opel and Peugeot explained that this move was aimed at "adjusting the production rhythm to adapt to the difficult European market". On the evening of the 14th, this "century-old company" announced its largest investment plan in history, investing 13 billion US dollars in the United States within four years.
Market contraction combined with external competition
In early October, another major French carmaker, Renault, responded to media rumors, stating that due to "uncertainties in the market", the company was "seriously considering" a plan to cut 3,000 jobs globally, including those at its headquarters in Boulogne-Billancourt. The group also emphasized that it had not "made any decisions".
The centrist senator, Annick Jacquemet, pointed out that the two main causes of the automotive industry's predicament are "unprecedented market contraction" and "competition from external European carmakers", with Chinese companies leading the way.
In response to this situation, the report listed 18 "emergency measures", including the requirement that vehicles sold in Europe must meet a 80% local content standard and setting a target of having at least 40% of local-produced batteries by 2035.
The report also suggested that the EU postpone the implementation of the decision to stop selling new fuel vehicles (including gasoline, diesel, and hybrid) from 2035; German Chancellor Merkel also said last week that "all efforts will be made" to push for the extension of the EU ban.
The German government's position has received support from traditional European automakers, but other stakeholders, including electric vehicle manufacturers, battery producers, and charging operators, as well as climate organizations, have called on the EU to adhere to the original timetable.
EU Emission Reduction Targets Become "Cage Constraints" for Automakers
For a long time, the EU has regarded the decarbonization of the automotive industry as a crucial step towards achieving greenhouse gas emission reduction targets. To this end, in 2023, the EU passed a law stipulating that from 2035, new cars emitting carbon dioxide will be banned from being sold within the EU.
The report believes that European automakers are caught between "a shrinking market and the huge investment needed for the transition to electric vehicles", and under the pressure of the 2035 deadline, they have little room for breathing.
Socialist senator Rémi Cardon reiterated that "from a long-term perspective, using electric vehicles does indeed align with (France and Europe's) interests", but "the problem lies in the entry cost", as the purchase price of electric vehicles is higher than that of internal combustion engine vehicles.
Therefore, the report suggests "directing public support towards small vehicles with more affordable production prices". In fact, after the pandemic, French automakers did tend to produce more high-end and higher-profit models.
Cardon also stated that he personally recommended strengthening subsidies for middle-class families to purchase electric vehicles and promoting this support policy throughout Europe.