Renault expects its Spanish franchise to deliver a 7-10% revenue jump to €8.5 billion by end-2005, partly boosted by its decision to shift global production of its new Modus model to Valladolid north of Madrid, a company spokesman told just-auto.

In 2003, the Spanish unit of the French automobile group posted a 14% revenue hike to €7.8 billion.

The ‘supermini’ Modus apart, the two-year revenue forecast will also stem from rising car demand and prices in Spain and Europe, the spokesman said.

Employing 7,000, the Valladolid plant is forecast to produce 115,000 units of the Modus this year and 300,000 in 2005.

In July, Renault moved global production of its Clio sedan to Slovenia and Flyns, France, after investing more than €300 million to begin assembling the Modus entirely in Valladolid.

“We are shifting from making 280,000 annual units of the Clio to making 300,000 of the Modus,” the spokesman said. “And it’s not the same to sell a Modus than a Clio; The Modus is more expensive and the Clio is at the end of its production life in Europe.”

While Valladolid is already exporting Modus worldwide, the first car will not hit Spanish dealers until 15 October. The Modus production shift will affect Renault’s second half results only, the spokesman said, making it difficult to forecast impact on 2004 turnover.

Renault’s director general Pierre Alain de Smedt told Spanish journalists at the Paris motor show that Spain remains a key market for the group, accounting for 10% of global sales. It’s “a very aggressive and exceptionally dynamic” market, Smedt said.

To prepare Valladolid for the Modus, Renault spent the bulk of €340 million in 2004 capital expenditures. Because most of the money has already been used, the company will lower 2005 capex to €305 million.

Renault leads the Spanish car market with a 12.7% market share, ahead of Citroen and Seat, the spokesman said. It plans to sell 1.5 million cars this year.

Ivan Castano