April 17, 2024

Peugeot and Renault to Repay Government Loans Early

The French industry minister, Éric Besson, told  France Info radio that the remainder of the 6 billion euros, or $8.7 billion, owed would be repaid “in the next few days,” which was “faster than anticipated.”

The decision, he said, showed that “confidence has returned” to the  sector.

In 2009, amid plummeting sales and the prospect of large layoffs, the French government announced that it would lend Peugeot  and Renault $4.4 billion each over five years at 6 percent interest. Renault Trucks, now owned by Volvo, also received aid.

In conjunction, the automakers introduced part-time work arrangements and curbed production at some plants.

Since then, the health of the two companies has slowly improved. The turnaround was helped initially  by government incentives for buyers that lifted sales in Europe but have now expired. Sales were also robust in emerging markets like Brazil, China and Russia.  

A report this week from the European Automobile Manufacturers’ Association,, showed new passenger car sales in the European Union fell 5 percent in March from the period a year earlier. Sales in Germany and France both grew, but they were weaker in Britain, Italy and Spain.

The two French companies have followed the same repayment rhythm, returning a first tranche of 1 billion euros ($1.5 billion) in the second half of 2010, then another 1 billion euros in February with the final 1 billion euros due on Tuesday.

Article source: http://www.nytimes.com/2011/04/23/business/global/23auto.html?partner=rss&emc=rss

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