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Renault sales fall 6.3% in 2012

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January 19 2013, 00:33AM


PARIS, Jan 18 AFP - French auto group Renault has reported a 6.3 per cent fall in its global sales last year to 2.55 million vehicles due to an 18 per cent collapse of its sales in Europe, but said it hopes for a rebound this year.

The company's shares rose as investors also cheered the fact sales outside Europe rose by 9.1 per cent to account for more than half of the total for the first time ever.

Renault sales chief Jerome Stoll said the company expected this year a "rise in sales and market share" on all markets, including Europe, without citing figures.

The carmaker's shares were leading gainers in Paris, up 2.33 per cent to 42.75 euros in afternoon trading, while the CAC 40 index of shares showed a gain of 0.04 per cent.

The performance of cars sold with the specific Renault label fell by six per cent to 2.1 million units.

But sales by the low-cost subsidiary Dacia rose by 4.8 per cent to 359,800.

"The group's international expansion strategy is bringing results," said Stoll in referring to the record sales outside Europe, with Brazil and Russia now Renault's number two and three markets.

This success could not totally make up for the drop in European sales, he noted, and said in the tough market conditions the company sought primarily to defend its margins.

Barclays Bourse trader Renaud Murail said Renault's sales drop was not a surprise to investors as the European Automobile Manufacturers' Association had announced earlier this week that new car registrations in the European Union had declined by 8.2 per cent in 2012 to reach the lowest level since 1995.

"Given the sluggishness of the European market, investors are saluting the fact that Renault - contrary to its competitor, PSA Peugeot Citroen - is less dependant on the Old Continent," he said.

Murail said synergies generated from Renault's alliance with Nissan should also help it bounce back.

He said it was also reassuring that Renault's restructuring plans are not generating political and social friction, unlike the confrontation sparked by Peugeot's downsizing effort.

Renault said this week it intended to cut 7500 jobs in France, or almost one in seven workers, by 2016.

However it said most of those losses would come from natural departures, with the rest hopefully from the broadening of an early retirement program.

It said no factory was targeted for closure and it plans to hold talks with workers on boosting competitiveness.

This the latest poor news for the French auto industry.

Peugeot intends to cut more than 11,000 jobs in France between 2011 and 2014, with the company offering voluntary departure packages and seen as likely needing to resort to forced departures to meet its goal.

Plans to close a plant outside Paris have bruised the company, and it was forced to seek government help to keep its financing arm afloat.

Renault is counting on the release on new models to secure its recovery, including the electric car Zoe.

The French state, which owns 15 per cent of Renault, pushed the company to lean on Nissan to expand production in France as it scales down output.