Plea from chief of Renault and Nissan for EU car subsidies

CARLOS GHOSN, the chief of Renault and Nissan, has called for European governments to support their motor industry in the way that America has pledged $25 billion of soft loans to speed development of more fuel-efficient, low-emission vehicles.

Speaking on the eve of the Paris Motor Show, which opened yesterday, Ghosn described the US initiative as: “A smart decision to achieve long-term objectives. It is not just an incentive, it lays down the financial means to get the job done. Other governments should take inspiration from this.”

Although Nissan has a factory in Tennessee, Renault-Nissan is unlikely to benefit from the assistance package.

President George Bush signed the Energy Industry and Security Act on Wednesday and details of the bidding process will be announced within 60 days. Those who qualify for the loans are likely to be companies that have had a manufacturing presence in the US for 25 years or more, which among carmakers means the hard-pressed domestic manufacturers General Motors, Ford and Chrysler - and Honda, which usually eschews government support.

Fritz Henderson, chief operating officer of General Motors, said he did not know how much it would receive but expected it to be “a meaningful amount”. Alan Mulally, Ford president, described the loans, which will be charged at Treasury rates, as “a really good plan” that will accelerate fuel economy programmes.

However, Ghosn’s call for Europe to follow America’s lead is likely to fall on deaf ears, even though manufacturers view the EU’s planned heavy fines on cars that do not meet forthcoming carbon dioxide limits as taking money from an industry that is now to receive support in the US.

Separately, Ghosn dismissed the prospects of a mega-deal between the large car companies, the latest rumour being a tie-up between Renault-Nissan and Chrysler. He said: “All initiatives are frozen. Everyone is scared about the chance of a financial meltdown and nothing more will happen until the world economy has a normal flow of credit.”

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