Renault do Brasil will produce the Mégane Sedan II in its plant in São José dos Pinhais, Paraná state. Production will start in the second half of 2005.

The car maker will invest about €50 million in the Brazilian assembly line which will have capacity to produce 20,000 units of the new sedan a year.

The Brazilian-made version will have 1.6-litre or two-litre 16-valve petrol engines and Renault will also build a diesel version for export plus a Brazil-exclusive version with a flexfuel engine, that can runs on petrol, alcohol or a blend of the two. Manual and automatic transmission options will be offered.

Renault said there were no plans to end production of the previous generation Mégane sedan and hatchback in its plant in Argentina.

The Argentine-made Mégane will remain on sale in Mercosur countries as an entry level model in the range.