Renault will begin producing lower-specification Modus models at its plant in Valladolid, Spain, after the innovative new supermini failed to meet initial global sales forecasts, the company's local communications director Jesus Collazo told just-auto.

Renault will also cut daily Modus output by almost 5% to 1,100 cars, compared to the 1,150 made daily during last September's initial production ramp-up. It exports about 90% of production.

"Demand has been a little worse than we thought and we are only selling to 35 countries from the 150-nation target we hope to achieve by year's end," Collazos said.

To boost sales Renault will start assembling a new 75hp petrol version and another, cheaper diesel version that will retail at about €11,000, he added.

"We launched the higher-end [80hp and 105hp diesel] Modus models at €13,000 thinking they would sell very well but we didn't have a lower-specification version to compete" with the cheaper Ford Fusion and Opel Meriva rival models, Collazos said.

Renault, currently the top-selling new car brand in Spain, had already planned to make cheaper Modus models but the unexpected lower has forced the company to rethink its production model mix with a greater emphasis on cheaper, less generously-specified models.

Collazos said offering cheaper Modus models will help Renault win customers from rental car, driving schools and leasing companies, which should help boost the overall sales for the new model line this year. The lower-price Modus will be promoted by a new advertising campaign.

Despite the current production scale-back, Collazos noted that Valladolid could still produce up to 1,300 Modus daily and that the company will meet that target if demand rises.

Renault hopes to make at least 240,000 this year, up from nearly 100,000 produced in the fourth quarter of 2004.

Union officials said the move will not trigger layoffs at the 7,000-employee Valladolid plant which will close for two days later this month.

Ivan Castano