Renault warns of 10% fall in European car market

Click to follow
LOUIS SCHWEITZER, the chairman of Renault, warned yesterday that the European car market could decline by up to 10 per cent this year.

The warning came as the French car group confirmed its position as one of the world's most profitable motor manufacturers by announcing a net profit for 1992 of Fr5.7bn ( pounds 705m) - up 85 per cent on the previous year.

Renault increased worldwide sales to 1.67 million - its best for a decade - took 10.6 per cent of the European market and, out of every 10 cars it built, sold six outside France.

Mr Schweitzer, whose job with the state-owned car maker is thought to be safe if the right wing secures power in this month's French elections, said that 'dark clouds were beginning to appear' over the Continental car market.

His forecast of a 9-10 per cent decline in car sales - implying 1.3 million fewer registrations - is one of the most pessimistic yet.

The sharp rise in Renault's profits came despite a tenfold increase in losses on its shareholding in Volvo of Sweden. Renault, which owns 25 per cent of Volvo's car operations and 45 per cent of its truck business, made a Fr1.376bn loss on the investment against a loss of Fr12m in 1991.

In total Volvo made an operating loss of 2.25bn Swedish kronor ( pounds 206m) compared with Skr1.17bn in 1991. Last year's loss was inflated by a Skr1.45bn provision to cover the closure of two Swedish car plants and cutbacks in the workforce of Volvo's truck division.

Mr Schweitzer deflected questioning about the privatisation of Renault by saying this was a matter for the next government, and denied that it had any interest in joint ventures with Fiat of Italy.

But he said Renault and Volvo could strengthen their relationship without a further share swap.