The made in France car, just a matter of taxes | Automotive

economists advising the government recommended the lower costs of the automotive industry in France, especially in encouraging the geographic concentration of p

The made in France car, just a matter of taxes | Automotive

economists advising the government recommended the lower costs of the automotive industry in France, especially in encouraging the geographic concentration of plants, to facilitate the relocation, in a report published Tuesday.

"A reduction of 20 % of the costs would double automobile production in French-and would allow him to reach his peak of production, compared to Germany (achieved in 2002)," says this note, the economic analysis Council (CAE).

The authors acknowledge that such a scenario is unrealistic. They consider it "more credible" the objective of a cost reduction of 5 % which would increase the production of automotive plants in france 18 %.

This lower cost could, according to them, spend by a reduction in production taxes. These taxes represent about 3.6% of the value-added of enterprises in France (the highest level in the EU outside Greece), against 0.5% in Germany.

But the tax of production do not weigh that approximately 2.5 % of the costs for car manufacturers. "If you removed everything, that would be a 10% increase in automotive production," said Thierry Mayer, co-author of the study.

36 % of the jobs lost since 2000

The report also recommends increasing the number of robots in the factories, noting a delay of France in this domain, compared to Germany, but also in relation to Italy. "Public policies, for example tax, should not be aimed at discouraging the expanded use of robots in the automotive industry ", note they.

Finally, the authors recommend to go "toward a geography more concentrated in automobile production in France," and to encourage "clusters" in the north and east of the country, which concentrate a large share of the activity, because the economies of scale to increase their competitiveness. "The topic is politically sensitive," admitted Mr. Mayer.

The note of the CAE points out that France has lost 36 % of its jobs in the automobile sector between 2000 and 2018, and it is dropped to the fifth position in europe in the field of construction of vehicles while she was in the second rank until 2011.

The car, however, remains a critical sector for the country with 210,000 jobs, full-time employees in 2017, and approximately 16 % of the revenues of the manufacturing industry.

The authors do not believe in relocation fast and massive. "The transfer of the automobile industry to France will be at best gradual and partial ", note they.

Updated Date: 22 July 2020, 01:33

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