Renault is to invest €540 million to produce its new small car model, Modus, which will be launched in the autumn, Chairman and Chief Executive Louis Schweitzer told a news conference to present the new model in Madrid.

Schweitzer said that €300 million is to be invested in Renault's plant in Valladolid, Spain, where the new Modus will be manufactured. Another €240 million is to be invested at Renault's suppliers for this car, he added.

Renault's Valladolid plant will have the capacity to manufacture 300,000 Modus per year, and the production line will have reached 80% of its total capacity by August, Schweitzer said.
 
He added that the company has decided to launch the Modus to complete its range of small cars, which already includes the Clio and Twingo models.

"Modus isn't a replacement for Clio. Modus isn't a replacement for Twingo. Modus is an additional offer," Schweitzer said.

Renault is planning to replace its Clio model with a new vehicle at the end of 2005, while Twingo will be replaced at the end of 2006, he said.

"We are in line with our target of having a model line-up that is among the youngest in Europe with an average age of between three and 3.5 years," Schweitzer said. "The aim is to progress in terms of operating margin in 2004 and beyond thanks to the renewal of the range."

The Modus shares a platform with the Micra - the top-selling small car made by the French firm's Japanese partner Nissan. Its launch marks the first time both firms have used the same platform.