French animation is enjoying a revival, with Luc Besson's Arthur And The Invisibles raking it in at the local and foreign box office and many other high-profile projects underway. But, just as in the US where an overstretched market is starting to buckle, France may not be able to sustain the pace forever.

Up until 1998, France was producing only one animated film every five years but was strong in TV. However, after Michel Ocelot's hit feature Kirikou And The Sorceress in 1998, "More producers turned their attention to pixels," explains Florent Mounier of 2d3D Animations which worked on last year's Asterix And The Vikings and 2003's Oscar-nominated Belleville Rendez-Vous. Ocelot's latest film, Azur And Asmar, played in Directors' Fortnight at Cannes last year and recently sold to The Weinstein Company for the US.

Animated fare now accounts for 45% of all French TV and film exports. Mounier says monetary constraints have helped develop original product, such as Belleville, and even Disney knock-offs which prove France's abilities.

But budgets are growing. 2d3D is working on $9.6m (EUR7.3m) A Case For Friends, a German, French, Italian co-production from Asterix co-director Jesper Moller and Tony Loeser, while Marc du Pontavice's Xilam is at work on a $15.7m (EUR12m) Lucky Luke adventure, Tous A L'Ouest. And Besson is preparing two Arthur sequels and acting as producer on Bibo Bergeron's $26m (EUR20m) Un Monstre A Paris.

Edinburgh-based Django Films - run by Belleville director Sylvain Chomet, his wife Sally and producer Bob Last - is working on The Illusionist, budgeted at $19.6m (EUR15m). Based on a script by Jacques Tati, it is being shot in 2D and should be ready for Cannes 2009. Fully funded by Pathe it was a relatively easy sell, says Sally Chomet. Given the pedigree, arranging the money was "very straightforward".

However, Chomet allows that the boom in French animation is not necessarily down to nationality, "I don't think it's a particularly French thing, but more about style. Sylvain's strength is in style and storytelling, not just that he's French."