5,000 job losses at Renault

Renault, Europe’s sixth largest car maker, has confirmed it is to reduce its European workforce by 5,000 through voluntary redundancies.

The French car maker blamed the deteriorating economic outlook and said this far exceeded the worst-case scenarios envisaged when it commenced a profit recovery plan in 2006.

Renault had planned to produce 3.3 million vehicles this year, however, it said this target would be missed by 300,000 and said it is cutting back its production targets due to weak sales in Italy, Spain and the UK.

In March last year, the company commenced production on the Logan model in Iran with 100,000 being sold in the first week.

It was Renault’s first investment in Iran since the Iranian revolution in 1979, with the cars being made by two local manufacturers, Iran Khodro and Saipa.

Renault is looking to reduce its costs by 10% and is to proceed with a previously announced rise in car prices to offset the increase in the costs of its raw materials.

However, in spite of the job losses, the company announced that worldwide sales grew by 2.3% in the first six months of the year. Half-year net profit increased from €1.07 billion to €1.467 billion.

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