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Renault plans Algeria plant in symbolic move

Renault will sign a pact Wednesday to build its first plant in Algeria during a highly symbolic visit by President François Hollande to the former French colony, a company spokeswoman said.

"Renault will sign the agreement tomorrow," she said, confirming press reports.

According to France's Le Figaro newspaper, the factory will be located in the second city of Oran and will be geared to the burgeoning local market.

Car sales in the north African country are expected to touch 450,000 units this year against 300,000 in 2011. Renault already holds a 25 percent market share.

According to the daily, the Algerian state will hold a 51 percent stake in the venture and Renault will hold the rest.

It will produce the Renault Symbol, a saloon based on its Clio compact sold mainly in markets where hatchbacks are not traditionally favoured.

The plant will have an initial capacity of 25,000 vehicles annually from 2014 and will rise to a maximum yearly output of 75,000, according to Le Figaro.

Algeria is an important supplier of oil to France, hundreds of French businesses operate there, and France is its top trade partner.

Hollande goes there on a two-day visit Wednesday, accompanied by a dozen government ministers and senior executives from top French firms.

The aim of the trip is to try and end simmering resentment over French colonial rule and buttress trade ties with the world's fourth-largest gas exporter.

In February, Renault inaugurated a giant factory in Morocco to build low-cost cars, sparking controversy in France where a loss of industrial competitiveness has rankled.

Renault is seeking to push no-frills models such as the Dacia range with its sales plummeting in Europe faster than any other carmaker.

The company has said it will make strategic investments overseas, notably in Russia and China, and also focus on top-of-the-range cars and electric vehicles.

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RENAULT

France ready to cut Renault stake to shore up Nissan partnership: minister

France is ready to consider cutting its stake in Renault in the interests of consolidating the automaker's alliance with Nissan, Finance Minister Bruno Le Maire said on Saturday.

France ready to cut Renault stake to shore up Nissan partnership: minister
A Renault employee works at the automaker's factory in Maubeuge, northern France. File photo: Ludovic MARIN / AFP
He was speaking in Japan after Italian-US carmaker Fiat Chrysler pulled the plug on its proposed merger with Renault, saying negotiations had become “unreasonable” due to political resistance in Paris.
 
In an interview with AFP on the sidelines of the G20 finance ministers meeting in Japan, Le Maire said Paris might consider reducing the state's 15-percent stake in Renault if it led to a “more solid” alliance between the Japanese and French firms.
 
“We can reduce the state's stake in Renault's capital. This is not a problem as long as, at the end of the process, we have a more solid auto sector and a more solid alliance between the two great car manufacturers Nissan and Renault,” he told AFP.
 
Last week, FCA stunned the auto world with a proposed “merger of equals” with Renault that would — together with Renault's Japanese partners Nissan and Mitsubishi Motors — create a car giant spanning the globe. The combined group would have been by far the world's biggest, with total sales of some 15 million vehicles, compared to both Volkswagen and Toyota, which sell around 10.6 million apiece.
 
But the deal collapsed suddenly on Thursday, with FCA laying the blame at the door of Paris. 
 
“It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” FCA said in a statement.
 
Le Maire said Renault should concentrate on forging closer ties with its Japanese partner Nissan before seeking other alliances.
 
Things need to be done “in the right order…. First the alliance (between Nissan and Renault) should be consolidated and then consolidation (more generally) and not one before the other.”
 
“Otherwise, everything risks collapsing like a house of cards,” he warned.
 
The minister said it would be up to the bosses of Renault and Nissan to decide how to push the alliance forward as ties between the two firms have been strained after the shock arrest of former boss Carlos Ghosn.
 
Renault is pushing for a full merger between the pair but there is deep scepticism of the plan at Nissan.
 
There were varied reactions from the French unions Saturday.
 
“The government is behaving like the agent of the big shareholders, favouring short-term profit to the detriment of the interests of the country,” said Fabien Gache, of the CGT union.
 
Cutting the state's share in Renault was abandoning its responsibility in the country's auto industry, he argued.
 
Franck Daout of the CFDT union said it backed a three-way alliance between Renault, Nissan and Japan's Mitsubishi — but not one between Nissan and Renault until the alliance had reached a “safe and sustainable maturity”.
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