"Brazil is no longer a low-cost country, but it remains competitive," Renault-Nissan Alliance president Carlos Ghosn told a press conference for journalists from countries where Renault operates production units.

Ghosn said the rising value of the real had reduced Brazil's attraction as a low-cost production centre but its skilled labour, high-volume capacity and strong domestic demand remained highlights.

"The [upward] currency [re]valuation is a consequence of change leading to economic growth," Ghosn said.

He added that Brazil is now a stage ahead of countries like Romania, Slovenia and Turkey, where the French-Japanese multinational automaker also has plants. These countries remain low-cost and the vehicles they build are extremely competitive due to their weaker currencies.

Labour is much cheaper than Brazil's. "In Turkey, for example, it is possible to work 60 hours weekly, for wages not found in western Europe," Ghosn said.

He added that, if Turkey joins the European Union and adopts the euro, it will lose a major part of its competitiveness. Until a few years ago, Romania paid wages equivalent to just EUR1 per hour, while Europe had already topped an average of EUR20 an hour.

In Brazil, the current average wage is equivalent to EUR8 an hour, but that includes social and economic benefits automakers offer voluntarily.

Ghosn's comments coincided with the simultaneous launch - at both the Frankfurt motor show and in Sao Paulo - of the Sandero, a new five-door hatchback based on the Logan platform but with a wheelbase 4cm/1.57in shorter.

Ghosn said the Sandero had been designed for Latin America but may head for other markets - he has not ruled out at least small volume exports from the São José dos Pinhais (PR) plant to Europe.

He also hinted production could also start somewhere in eastern Europe as the Romanian plant, where the Logan is built, will soon reach capacity.

Sandero production and sales begin here in Brazil in December.

Fernando Calmon