PSA Peugeot-Citroën has been struggling to offer low finance rates to customers since its banking arm, Banque PSA Finance, had its credit score downgraded, which in turn has made it hard for the French carmaker to compete with brands that offer lower finance rates, such as Volkswagen. The French government recognized the catch-22 and, after negotiations with PSA and European Union approval, has guaranteed the banking arm seven billion euro in bonds to secure its debt and lower borrowing costs, Automotive News reports. The infusion of bonds will be spread from January 1, 2013 through December 31, 2016.

As part of the requirements for EU approval, PSA agreed to refrain from acquisitions in excess of 100 million euro per year and curb its debt levels, Automotive News reports. The EU Comission was required to approve the bond infusion before it could take place in an effort to reduce to a minimum "the damaging effects for competitors who have not received support from public funding," said Joaquin Almunia, EU Competition Commissioner.

In addition to the bonds for Banque PSA, a diesel-hybrid program will also receive 86 million euro from the French government, which was also approved by the EU Commission.

PSA was hit hard by the European auto-market recession and posted a loss of five billion euro last year, and it still has an appetite of 100 million euro per month. We hope this is the start of a turnaround for the struggling automaker.


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  • 24 Comments
      Snark
      • 1 Year Ago
      And in case anybody wonders why all those weird rumors of GM buying PSA floated around last month, well, here's your answer.
        Snark
        • 1 Year Ago
        @Snark
        Why the downvote? If you didn't recognize that story as a PSA effort to scare the French government and public into giving them this loan, you haven't been paying attention.
          aatbloke1967
          • 1 Year Ago
          @Snark
          Why would you be concerned about "upvoting" and "downvoting", unless you're younger than 12?
      • 1 Year Ago
      [blocked]
        • 1 Year Ago
        [blocked]
        Snark
        • 1 Year Ago
        Every post you make is more incoherent than the last.
          • 1 Year Ago
          @Snark
          [blocked]
      JayH
      • 1 Year Ago
      I think nowadays PSA has competitive enough products to return to america... peugeot could be the sports oriented brand, citroen more upscale and then have the DS citroens be sold as a high performance luxury arm... I could only dream *_* in this day and age, brands can't afford to rely solely in one market... selling in america, even if in small numbers could be PSA's salvation... FIAT made it... everybody said it would fail because of the past but I think people are willing to give a second chance if the products are good enough...
      William
      • 1 Year Ago
      France is broke.
        • 1 Year Ago
        @William
        [blocked]
          RGT881
          • 1 Year Ago
          If you've read my previous comments then you will know that I am not a fan of the French government. I'm still intrigued as to what in the world is going on with their treatment of Mercedes and the whole refrigerant fiasco. SAE seems to have sided with France whilst leaving out BMW, VW, Daimler. Anyway, I am not surprised in the slightest that France has gone this route because they are desperate and are in the survival mode. They are willing to do anything they can to preserve the French way of doing things, but it doesn't mesh well with the Euro currency, French contribution to EU budget, French economy, exports and so on and so forth. Eventually the can that they are kicking down the road will hit a concrete wall.
          • 1 Year Ago
          [blocked]
          aatbloke1967
          • 1 Year Ago
          Yes, what a world - the failure of capitalism.
      Zortella
      • 1 Year Ago
      I always though Citroen's were cool and wish they still sold them here in the States.
        • 1 Year Ago
        @Zortella
        [blocked]
      Drakkon
      • 1 Year Ago
      In other news, France is banning import of German cars. No relation.
      Ryan C. Lawson
      • 1 Year Ago
      I thought that said US approval. I got very excited.. Damn...
      George
      • 1 Year Ago
      The US sanctions vs Iran have been very costly for both Renault and specially PSA.
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