French president pressures Renault, gets no pledge

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President Nicolas Sarkozy grilled top managers of carmaker Renault on Saturday but failed to win pledges from them to centre production of their new small car at a factory in France rather than in Turkey.

French Industry Minister Christian Estrosi has heaped pressure on Renault to make cars destined for the French market at home, even suggesting the state could raise its 15.01% stake in the group to get a bigger say.

At stake is where the new Clio 4, expected in 2013, will be produced. Renault is looking at sharing production out between a plant in Bursa, Turkey and Flins near Paris, with most of the work expected to go to the Turkish factory.

Renault executive chairman Carlos Ghosn and chief operating officer Patrick Pelata talked for over an hour with Sarkozy and Estrosi. They left shortly after 1700 GMT without making a comment to reporters waiting outside the Elysee palace.

But a statement from the president's office suggested Sarkozy had been unsuccessful in convincing Renault's management to locate the lion's share of the new Clio work in France.

It said Ghosn had agreed to keep jobs at the Flins plant and make both electrical and fossil-fuel cars there in the future.

In a separate statement, Ghosn said he had confirmed to the president that the Clio 4 would be made in Flins and Bursa.

He added the future of the Flins plant was guaranteed and employment would be maintained.

"My responsibility and my motivation is to make Renault an innovative winner in an industry undergoing deep transformation," he said.

Renault was privatised in 1996. In addition to the French government's stake, Japanese ally Nissan Motor Co has 15% of the company. It is the country's second-largest carmaker behind PSA Peugeot Citroen.

In February last year, France provided three billion euros (USD 4.33 billion) each to the carmakers in five year bonds, at a rate of 6%, to finance investments into clean vehicle production and the makers agreed to avoid slashing jobs in 2009.

European Competition Commissioner Neelie Kroes said on Thursday that she would study again whether there were hidden conditions attached to these loans that limited the companies' freedom to conduct their business.

Work on the current Clio, launched in 1990, is shared between Flins, Bursa, Novo Mesto in Slovenia and Valladolid in Spain. The Turkish plant is a joint venture with Oyak Group and Renault owns a 51% stake.

Renault makes 180,000 Clio cars per year in Turkey and some 125,000 in Flins. In 2008, Renault was No. 11 on the world car production ranking and its 44% subsidiary and ally Nissan was No. 6. Combined they made more cars than Ford Motor Co and fewer than Toyota Motor Corp, Volkswagen and General Motors.