French Government Eager for Auto Makers to Collaborate on Advanced Tech

PARIS – The French government wants the nation’s auto industry to be more like Germany’s, working together to develop the vehicles of the future.

In particular, Louis Gallois, the commissioner in charge of a €750 million ($973 million) French investment fund for industry research and development, says he wants French auto makers to collaborate on hydrogen projects.

“I regret that Renault and PSA (Peugeot Citroen) don’t work together more,” Gallois says at a conference sponsored by Moveo, the automotive cluster for Paris and Normandy. “In Germany, there is tremendous competition, but the auto makers work together on advanced research.

“I regret also that the first-tier suppliers, Faurecia and Valeo, don’t work together more.”

Where Germany’s VDA manufacturers’ group represents both suppliers and auto makers, France has separate organizations for the two industry sectors. Several years ago, the government created the PFA auto industry platform uniting suppliers and auto makers, and Gallois says that was a move in the right direction.

However, representatives from both Renault and PSA attending the Moveo conference say they are committed to their own ideas of research in directions that fit with their individual brands, and they express no particular support for working together more.

While their companies are members of Moveo and PFA and participate in some joint projects, the executives indicate they are not unhappy with the status quo.

For example, Eric Choffel, director-electric vehicles at PSA, says, “We are already involved in mobility projects. We have started to create our projects.”

He notes PSA’s business side is involved with its first research project with startup company Deways, which it met through Moveo. The project, E-share, is trying to develop a system of peer-to-peer car sharing in which privately owned vehicles would be rented by a company for its employees.

The country wants a sound auto industry because it means jobs and tax revenue. However, since 2005, automobile production in France has dropped from 3.5 million units to 2.2 million.

The current recession accounts for some of the decline, but auto makers and suppliers have outsourced considerable production to lower-cost countries as well as some engineering. Despite those actions, he says, “the French industry has a price/perceived-quality relationship that exposes it to very strong international competition.”

Gallois urges auto makers to move their cars up the value scale through better innovation, quality and service, and he approves the commitment to electric cars at Renault and diesel hybrids at PSA.

“The French industry has turned toward the electric car and is in the process of turning toward hybrids,” he says. “The industry is positioning itself for the products of the future.”

The government supports the development of electrified vehicles both for environmental reasons and to improve the chances new-technology cars will be manufactured in France.

Not only is research money funneled to the industry through groups such as Moveo, the country provides sales incentives of up to €7,000 ($9,000) for electric cars and €4,000 ($5,200) for hybrids.

Despite Renault’s commitment to EVs and the presence of battery supplier Saft, Gallois says a supply line for batteries has not been created in France.

“We would like to see more added-value realized in France for electric powertrains,” he says, noting France is behind countries such as Germany, Japan and Korea in the area. Batteries are a key element of electric cars, but “few projects have been presented for investment support.”

At one time Renault planned to make batteries with the French nuclear agency at a plant near Flins, where it will build the Zoe electric car, but CEO Carlos Ghosn said in February that suppliers had improved their offers and Renault would put its production plans on hold.

Besides being behind with batteries, the French industry trails other countries in developing hydrogen powertrains, Gallois says.

Germany has been the home of many projects using hydrogen directly as a fuel or as the energy source for fuel cells. One current project has BMW, Mercedes, Toyota and Hyundai working together. Japan and Korea also are cultivating automotive hydrogen projects, and Toyota and Honda have had several generations of hydrogen fuel-cell prototypes.

“Nothing of that sort is happening in France,” Gallois says. “I am perplexed by the hesitations of the French industry concerning hydrogen. As soon as we have a source of hydrogen, if it can be safely stored in a car, we have a solution that with a fuel cell would provide high-quality electric power with a range of more than 500 km (310 miles), and refueling would take only a few minutes like a gasoline tank.”

While there is no acceptable business model at the moment for hydrogen, he says, it could be one of the avenues to take for the EV, and to ignore it now is dangerous.

Some €750 million in government research funds is available to the auto industry, Gallois says, and to date €320 million ($415 million) has been committed to 35 projects. Another 20 projects involving €150 million ($194 million) are under study, and “a packet of €250 million ($324 million) remains available.

“We consider that it is one of our priorities, given the situation of the French automobile industry, to see that this money is used as soon as possible.”