RENNES, France -- PSA/Peugeot-Citroen and Renault have criticized the French government's plans to end its diesel-friendly policy for cars.
French Prime Minister Manuel Valls has said the government will undo policies that in the past have "favored the diesel engine."
Next year, the government will raise excise tax on diesel fuel and remove incentives for diesel car purchases. Valls said at an environmental conference on Friday that the government will "progressively" undo policies that encourage diesel car sales.
France's biggest automaker, PSA/Peugeot-Citroen, said the policy change will hurt its competitiveness.
"Diesel is a key technology to reduce greenhouse gas and to fight against climate change. This tax measure will place France at a disadvantage compared with Germany," a PSA spokeswoman told Automotive News Europe.
PSA has been a leader in diesel technology.
France has for decades encouraged car buyers to choose diesel cars through lower fuel and purchase taxes. But politicians are reversing the policy, spurred by green campaigners who complain that diesel emissions damage air quality in busy cities and cause health problems.
PSA and Renault both said the tax increase on diesel fuel will not improve air quality.
"The tax does not differentiate between modern and older diesel engines, and thus has no real environmental impact,” a Renault spokesman said.
Renault said fuel tax increases planned by the government will raise the price of diesel by 4 cents, compared with an increase of 2 cents for gasoline.
The government has yet to specify how it plans to dismantle diesel car purchase incentives.
About 80 percent of French motorists drive diesel-powered cars.
Reuters contributed to this report
