Renault expects to make about 325,000 cars in Spain this year, down 24% from the 425,000 produced in 2005, as sales of its Modus model continue to perform poorly.

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However, the French car giant’s Spanish subsidiary announced a 44% jump in 2005 net profits to EUR204m, largely inflated by a land sale to real estate firm Metrovacesa. Without the extraordinary gain, profits would have been EUR85m, down from EUR141.6m last year.


Revenues fell 1.8% to EUR8.4bn with export turnover declining 4.2% and local sales rising 1.1%.


A Renault spokeswoman confirmed that 2005 production also fell by 90,000 units as the firm trimmed the Modus’ daily rate to 560 units from 1,300.


Output of the Megane (Spain’s best-selling car) was also cut to 1,100 units from 1,300 units as sales sagged ahead of the end of its five-year life cycle, the spokeswoman noted.

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In a ray of hope for the automaker, the redesigned Clio will be assembled at Valladolid from this September, boosting the plant’s output by 12,000 units, the spokeswoman said, adding that the huge factory is currently running at 43% capacity.


Renault will also increase engine and gearbox production at its Valladolid and Seville plants by 13% and 16% respectively, the spokeswoman said.


The hike is fuelled by new engines for both Renault and third-party customers such as Nissan, Suzuki and Samsung, she added.


During the year, Renault dismissed 1,500 temporary workers as part of a cost-cutting programme under its 2006-2009 strategic plan.


The spokeswoman said no more job cuts are envisioned.


Ivan Castano