Renault will build the Megane Classic saloon in Brazil, the business daily Gazeta Mercantil said, citing Renault's Mercosur countries managing director Luc-Alexandre Ménard.

The saloon is also assembled in Renault's Cordoba factory in Argentina.

Gazeta Mercantil said that Renault is negotiating with suppliers for the Brazilian-built saloon which will be built at its plant in São José dos Pinhais, in the southern state of Parana. Production should begin by the end of the year.

This will be the fourth Renault vehicle launched in Brazil in 2001 as part of its ambitious expansion plans. An updated Scenic was launched recently.

The Brazilian Megane saloon will compete with General Motors' Opel-designed Chevrolet Astra and Vectra models, the Fiat Brava and Marea, the Volkswagen Polo and the Ford Focus, Gazeta Mercantil said.

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