France’s Government is injecting more than eight billion euros (£7.1 billion) to save the country’s car industry from huge losses wrought by virus lockdowns.

It wants to use the crisis to make France the number one producer of electric vehicles in Europe.

Starting next week, consumers can get up to 12,000 euros (£10,669) from the Government for buying an electric car under the “historic” plan unveiled Tuesday by president Emmanuel Macron.

Virus Outbreak France Auto Industry
Emmanuel Macron visits Valeo’s premises in northern France (Ludovic Marin/AP)

“Our country wouldn’t be the same without its great brands – Renault, Peugeot, Citroen,” he said.

The president decried an “unprecedented crisis” for the industry, with production plunging more than 90% in France alone.

Car-makers and Governments around the world are grappling with similar losses.

Politicians are divided over whether and how to bail out an industry that already won billions in support a decade ago after the 2008 financial crisis – and that was already facing major new costs and disruption with growing demand for autonomous and cleaner cars.

Mr Macron’s plan does not include a five billion euro (£4.45 million) French Government loan guarantee under discussion for struggling Renault or the millions already spent on temporary unemployment payments to workers told to stay home for weeks to keep the virus at bay.

The new plan includes Government subsidies to encourage consumers to scrap their old cars and buy lower-emissions models and longer-term investment in innovative technology.

Mr Macron set a goal of producing one million electric cars in France by 2025.

“Our country should embody this avant-garde,” he said.

“We need not only to save (the industry) but transform it.”

French unions blockaded a Renault plant in western France on Tuesday, fearing fallout from the virus could lead to widespread job losses and factory closures.

Bailouts a decade ago included a Government bonus plan that encouraged consumers to buy newer cars, though that did not prevent thousands of job cuts.

Virus Outbreak France Car Industry Rescue
Renault will be ordered to keep open two French factories (Christophe Ena/AP)

Renault is expected to announce a £1.78 billion cost-cutting plan to unions this week.

Mr Macron said the Renault loan guarantee is contingent on keeping open two key French factories.

He met industry representatives and unions at the Elysee presidential palace on Tuesday morning, then announced the investment plan on a visit to supplier Valeo, which makes equipment for electric cars, at its factory in northern France.

France’s car industry employs 400,000 people and is a big part of its manufacturing sector.

Showrooms were shut and production suspended as the virus swept across the country in March.

France started easing restrictions on May 11.

The plan to support the industry comes at a crucial time for Renault, which came into the virus crisis in particularly bad shape after the 2018 arrest of its long-time chief executive Carlos Ghosn.

French finance minister Bruno Le Maire warned the company’s survival is at stake.

Renault and Nissan have scheduled an announcement Wednesday that is expected to address the future of their alliance.