Industry minister confirms an end to the scheme is near
14 July 2009

France will gradually begin to phase out its scrappage incentive scheme, according to the country’s industry minister.

Christian Estrosi said the French government was now looking to wind down the scheme, despite its success and warnings from Renault CEO Carlos Ghosn.

Ghosn said any withdrawal of scrappage schemes would cause a huge shock to the market and new car sales would tumble once again. Instead, Ghosn said a gradual withdrawal was necessary.

Renault: “No recovery until 2011”

Estrosi said, “The scrappage subsidy cannot be indefinitely maintained. We have to think about stopping it progressively. We're working on it.”

The French scrappage scheme was introduced as part of a wider fiscal package designed to boost the economy.

New car sales were up 7.1 per cent in June, and around 200,000 (or 20 per cent) of the new cars sold this year in France have been generated by the scrappage scheme.

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