Renault in eye of French protectionist storm again

The French government is putting pressure on the country's second-biggest carmaker to safeguard jobs in France and buy French products as an economic crisis and unemployment fan deep-rooted protectionist feelings.

Christian Estrosi, Industry Minister and mayor of the Mediterranean coastal town of Nice, has summoned the chief operating officer of Renault to his offices on Wednesday as the group considers producing a new small car in Turkey. The state has a 15.01 per cent stake in Renault.

"I tell you very clearly that we are shareholders of Renault ... and so we have the right to say what we think. We have the right to affirm that when we sell a Renault car in France, and Renault is a French name, a French brand, we do not produce it abroad," he told France 2 television on Tuesday.

Estrosi's outburst chimes with similar remarks by President Nicolas Sarkozy about preserving jobs in France and about the strong euro hampering exports. However Finance and Economy Minister Christine Lagarde has not joined in the Renault bashing, yet.

Patrick Pelata is second in command at Renault after Carlos Ghosn, who also heads Japanese ally Nissan Motor Co- the second-biggest shareholder with a stake of 15.00 per cent.

The alliance of Renault and Nissan, which also includes Korea's Samsung, Romania's Dacia and Russia's AvtoVaz, is among the biggest car groups in the world, along with Toyota Motor Corp of Japan and Germany's Volkswagen AG.

Renault is in a better financial situation than General Motors, Chrysler or Mitsubishi Motors Corp. But according to the weighted estimates in StarMine, financial analysts expect a net loss of €2.6bn ($3.77bn) for 2009 and a small profit of 100 million euros in 2010, with a return to a more substantial 1.1bn profit in 2011.

The year 2009 was supposed to have been a year of celebrations at Renault, following a much-touted profit and performance enhancement plan by Ghosh. But the credit crisis and steep fall in consumer spending and car sales derailed that.

Renault is now seeking to boost sales in emerging countries -like Turkey- and reduce production costs.