Breaking News : European Carmakers Seek $55 Billion in EU Aid, Marchionne Says

LONDON : October 4, 2008 - Carmakers want the European Commission to lend them 40 billion euros ($55 billion) to help develop environmentally friendly vehicles, after a similar U.S. move, Fiat SpA Chief Executive Officer Sergio Marchionne said.


The U.S. Congress on Sept. 27 approved legislation providing $25 billion in low-interest loans to the domestic auto industry after manufacturers including General Motors Corp., Ford Motor Co. and Chrysler LLC said they needed taxpayers' help to finance the production of more fuel-efficient cars.

``We've seen that the U.S. industry is now getting $25 billion worth of support in terms of financing,'' Marchionne said yesterday in an interview at the Paris Motor Show. ``It would be absolutely necessary that the European Commission do exactly the same thing. It was $25 billion for the U.S., in our case it's 40 billion euros because we have twice the capacity.''

The European Union is debating legislation that would cut average car emissions of carbon dioxide by a fifth to 130 grams a kilometer by 2012. The target would be achieved by varying goals for individual manufacturers. The commission has estimated average car prices may rise by 1,300 euros because of the new technology required.

``We're trying to deal with proposals on the regulatory framework which don't make a lot of sense given where we are,'' Marchionne said, without elaborating. ``We need to have a much more proactive, a much more intelligent approach coming out of the European Commission.''

[Source : Bloomberg]