Renault says to invest 5.7 billion euros in industrial sites

2nd February 2011, Comments 0 comments

French automaker Renault on Wednesday unveiled plans to invest 5.7 billion euros ($7.8 billion) in its industrial sites by 2013, with 40 percent to go to plants in France.

The company, currently embroiled in an industrial espionage scandal, said it had no plans to close plants or lay off workers as it tries to adjust production capacity and staffing to shifts in global demand.

Renault said it expected a "lasting decline" in the European market, and that forecasts for 2016 "do not see the European auto market returning to its pre-crisis level of 2007."

Car market growth will be driven by markets outside Europe, notably Brazil, Russia, India and China, the company said, adding that the market outside Europe was likely to expand nearly 50 percent by 2016.

"Our strategic plan enables us to adjust industrial capacity to global demand, without closing sites or implementing redundancy plans or staff reduction plans," chief executive Carlos Ghosn said in a statement.

Renault will present its medium-term strategic plan on February 10 along with its 2010 full-year results.

The automaker said it was adjusting its industrial base as part of the plan and adapting capacity in Western Europe.

It will focus on added-value products, chiefly European middle- and upper-range vehicles, light-commercial vehicles, and electric vehicles and their motors and batteries.

Plant capacity was being expanded in the rest of the world, especially in emerging markets such as Russia, India and Brazil, Renault said.

The firm aims to generate 43 percent of its sales outside Europe in 2011, compared with 37 percent in 2010 and 17 percent in 2000.

Renault said it would manufacture the successors to its upper-range Espace and Laguna models at its plant at Douai in northern France from 2014, and that they would be based on a platform shared with Renault's partner Nissan.

The strategic plan to be rolled out next week is expected to identify areas for deepening manufacturing and organisational synergies with Nissan.

France will remain the heart of Renault's plan to become the global leader -- along with Nissan -- in electric-vehicle technology.

Renault last month suspended three of its senior executives it accuses of industrial espionage reportedly involving the company's key electric cars programme.

The firm is readying production of its Zoe plug-in electric minicar and its Kangoo electric van at two plants in France, and is predicting that 80 percent of the electric vehicles sold world-wide in 2015 will be made in France.

The planned battery plant at Flins, west of Paris, will be producing 100,000 units annually by 2013, Renault said, and another French engine-manufacturing facility at Cleon would make a third-generation electric motor.

The company said it plans to make a new van at its plant at Sandouville, western France, that currently makes the Laguna, with production targeted at 100,000 units a year.

Outside France, Renault will start production at its new plant in Morocco next year and a second production line will come on stream in 2013, making entry-level vehicles destined for Europe, Africa, Mexico and the Middle East.

Renault's shares were trading down 2.57 percent on the Paris CAC 40 exchange by late afternoon Wednesday.


-- Dow Jones news wire contributed to this story --

© 2011 AFP

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