Searching for Industrial Policy: The Long Decline of the French Automotive Industry

Abstract

Starting from the second half of the 2000s the French automotive industry has fallen into a spiral of decline. This chapter analyses the main causes of this prolonged crisis as well as the main policy responses to it. It shows that most of the ad-hoc measures taken during the crisis to prevent the collapse of the industry have proven successful. However, the attempts to address the structural causes of the decline and restore the long-term competitiveness of the French automotive industry had failed to produce positive results. Further, it discusses the future prospects for the French automotive industry at the light of two ongoing major transformations: the shift towards electro-mobility mainly driven by new post-“Dieselgate” (emission scandal) European Union regulations; and the long-term transition towards autonomous driving pushed by the entry of companies from Silicon Valley.