PARIS, Dec 4 (Reuters) - France took steps to shore up its embattled car industry on Thursday by giving incentives to consumers to buy new cars and pledging a 1 billion euro ($1.3 billion) credit line to help people finance any purchases.
A slowdown in economic growth spurred by the global financial crisis has hit the global car sector hard, forcing auto makers in France to halt production or shed jobs as auto sales plummet.
PSA Peugeot-Citroen SA, Europe's second-biggest car marker in terms of European sales, said last month it planned to slash 2,700 jobs across its sites in France.
President Nicolas Sarkozy singled out the car sector as being in special need of state help as he unveiled a 26 billion euro economic stimulus package in the northern city of Douai.
"We need to clear stocks so that production can get going again," Sarkozy said.
Government officials have said around 1 million unsold cars are standing on parking lots at factories or dealerships.
To help clear the backlog, France would give a 1,000 euro handout to people purchasing cars with carbon dioxide emissions of less than 160 grams per kilometre.
The government was also providing a 1 billion euro credit line to car financing units so consumers could continue to buy cars on credit, he said.
France would also set up a 300 million euro fund to support an industrial restructuring in the sector, a third of which would be financed by the state. The fund comes on top of efforts to finance the development of electric cars.
Auto firms benefitting from state aid would need to do their bit too and give guarantees they would not outsource production outside France. More help for the car sector in France could be on the way.
"It cannot be ruled out that the state will be led to do more, depending on what the American authorities decide and in the framework of concerted European action," Sarkozy said. (Reporting by Tamora Vidaillet; editing by Marcel Michelson and Simon Jessop)