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5,000 European jobs go at Renault

Thursday, 24 Jul 2008 11:42
Renault is cutting 5,000 jobs in a bit to slash ten per cent of its costs, despite increased half year profits
Renault, the French car manufacturer, has revealed it is going to cut its European workforce by 5,000 through a voluntary redundancy scheme.

The company said this decision was prompted by the deteriorating economic outlook, which has "far exceeded the worst-case scenarios envisaged" when the company started a profit recovery plan two years ago.

Renault is the sixth largest car maker in Europe, but it will now be scaling back production targets because of weak sales in Spain, the UK and Italy.

More than three million vehicles were planned for production this year, but this target will now be missed by 300,000.

Production in Iran has also been lower than expected, another factor behind the voluntary redundancy decision.

Renault started making the Logan model in Iran in March 2007, with 100,000 being sold in the first week of production.

It was the company's first investment in the country since the revolution in 1979, with the vehicles being produced by two local manufacturers - Iran Khodro and Saipa.

With the voluntary redundancy decision, Renault is looking to cut costs by ten per cent, before going ahead with a previously announced rise in car prices.

The company did manage to report that worldwide sales rose by 2.3 per cent in the first half of this year.

The company's half year net profit rose from €1.07 billion to €1.467 billion, similar results to those from rivals Volkswagen, Peugeot-Citroen and Fiat.

All three said their earnings had risen, despite falling sales in Western Europe.

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