Christian Streiff, chief executive of Peugeot Citroën, has attacked private equity taxation, saying that the industry enjoys unfair advantages.

In an interview with The Times, Mr Streiff also raises concerns about the commitment of private equity at a time when buyout firms are moving increasingly into car manufacturing.

The Peugeot chief is the latest high-profile executive to call for changes in how private equity is taxed and to raise concerns. His comments come as the automotive industry is poised to be transformed by private equity after the investment funds bought Chrysler and Aston Martin and as they are bidding for Land Rover and Jaguar.

Mr Streiff said: “For me there is a bias which should not exist and that is a tax bias. The tax escaping of investment funds is something that the Government should look at seriously.”

Unions are pressing the Government to intervene in the sale of Land Rover and Jaguar if the successful bidder is from private equity because they fear that investment funds will not commit themselves to long-term development of carmaking. The automotive industry has long lead times from design to development to market.

Mr Streiff said that private equity often brought short-term financial and management discipline that could be lacking in a very large organisation. But he said: “In many industries you have to look to the short term, medium term and beyond. Toyota didn’t build a management structure in one decade, it did it in many decades, and that won’t happen with investment funds – so there are real limits to the ability of investment funds to bring an industry some steps forward.”

Mr Streiff said that some private equity groups behaved responsibly and invested for the long term. But he said: “All of the investment funds are not playing this way . . . Some of them are just squeezing the lemon, trying to sell, trying to find the fool which will not look at it and buy it . . . others are doing sound industrial work, investing properly.”

The head of the French carmaker added: “I am not part of the people who say it [private equity] is just the devil. But it is something we should look at in terms of the contras and if there are significant contras we should look at getting rid of them.”

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