France considering new aid for auto makers

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Renault SA's chief on Tuesday called for rapid intervention from European governments to save the auto industry from collapse.

Carlos Ghosn, who is also president of the European car makers association, said the auto industry is facing a "brutal" fall in auto sales combined with tight credit conditions.

"In these conditions, the rapid, determined and coordinated intervention of governments and European institutions is needed, given the importance of the automobile industry in Europe," he said at a summit organized by the French government to address the crisis.

Car makers have an "urgent need" for liquidity, he said, calling on governments to assure access to credit at reasonable terms "via loans at preferential terms like what was done in the U.S."

The auto industry is one of France's major employers, providing jobs for around 10 percent of the French work force.

Industry Minister Luc Chatel, who hosted the summit, said the French government is ready to help cushion the fallout from the economic crisis and credit restrictions.

"The president made a strategic decision: We will not let our car industry fail," he said.

French car maker Renault SA reported a 28.5 percent drop in vehicle sales in December as customers shied away from big ticket purchases. That led to an annual slump of 4.2 percent in 2008, which compares with a 4.9 percent fall at cross-town rival PSA Peugeot-Citroen.

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