Fiat gets EU loan to develop greener cars

The loan will "contribute hugely" toward researching technologies that use less energy and release less greenhouse gas.

By
June 17, 2009 12:36
1 minute read.

 
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Italian car maker Fiat SpA on Tuesday received a €400 million loan from the European Union's government-backed European Investment Bank to help it develop more fuel-efficient cars. Fiat CEO Sergio Marchionne said the loan would "contribute hugely" toward researching technologies that use less energy and release less greenhouse gas. The EIB is lending more than €7 billion to car makers such as Fiat, BMW AG, Daimler AG, PSA Peugeot-Citroen and Renault SA to help them develop cars that meet stricter carbon dioxide emission standards as part of the EU's effort to curb global warming. The EIB has resisted calls to channel any more money to the car industry because the planned loans already make up 10 percent of its borrowing plans this year. Backed by the EU's 27 governments, the bank sells bonds to raise the money it lends out to infrastructure projects. The European car industry association ACEA earlier this year said it needed some €40b. in state loans to keep businesses afloat this year as sales slump. It forecast that sales could drop by up to 25% this year and output by a quarter. The European car industry, the world's largest, produces more than 18 million vehicles, but at last count sells only about 12 million a year. It employs some 12 million people directly and many more in the supply chain.

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