EU Automakers Want More State Aid

Car manufacturers' association ACEA is calling for soft loans to help the industry invest in cleaner cars and hold onto high-skilled workers.

BRUSSELS, Belgium (AP) -- European car makers requested more government help -- and fast -- to ride out the recession, saying Tuesday they expect to sell 15 percent fewer cars this year.

Car manufacturers' association ACEA is calling for soft loans to help the industry invest in cleaner cars needed to hit EU climate change cars and hold onto high-skilled workers.

"Urgent and decisive government support is a precondition to prevent the situation becoming worse," ACEA said.

They said they wanted governments to give incentives to entice people to buy new cars and scrap older models. They also want to reduce the cost of hiring seasonal workers.

Renault chief executive Carlos Ghosn said car makers have asked the European Investment Bank β€” funded by EU governments -- which is only lending the industry half of the money it wants.

He said car companies had asked for euro6 billion in loans to match industry investment in low-emission vehicles.

They will get only euro3.2 billion -- and they won't get it until March.

"There is no reason to wait that long," he said in a statement.

Ghosn was due to meet EU officials for talks on a bailout package Tuesday but was forced to cancel because of fog at Brussels airport.

Britain became the latest EU nation to announce help for its car industry Tuesday. It promised to unlock loans of up to 1.3 billion pounds ($1.8 billion) from the European Investment Bank and a further 1 billion pounds in loans to fund investment in green-friendly vehicles.

France last week said it might give extra aid of euro5 billion to euro6 billion (up to $8 billion), adding to earlier help worth around euro1.3 billion.

Germany's stimulus package plans on giving euro2,500 toward the purchase of a new car to anyone who agrees to junk their existing one if it is more than 9 years old.

Car output fell by a fifth in the last quarter of 2008, ACEA said.

Car makers employ some 2.2 million people directly in Europe. Another 10 million workers rely on the industry.

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