Boost for French car production

Renault Clio

There has been a boost for French car production as the carmaker Renault announced it will build its new Clio model, dubbed Clio 4, in both France and Turkey.

The announcement from Renault will calm fears that production will move outside of France.

French President Nicolas Sarkozy put pressure on the firm to keep building the model at its Flins factory outside Paris.

The French state has a 15 percent shareholding in Renault.

Sarkozy had said he had not pumped government money into carmakers for them to move production abroad.

Following a meeting between President Sarkozy and Renault CEO Carlos Ghosn in Paris at the weekend, Renault said that it would continue Clio production in France. However, it was unclear how the split to production between France and Turkey will look, Just-Auto states.

Ghosn said after the meeting that the new Clio car will be built in Flins, France, and Bursa, Turkey, without detailing the split, and said employment would be maintained.

Future of car production for Renault

Carlos Ghosn, Renault chief also said the Flins factory would be used to build a new electric car, the BBC said.

"Renault is a French company, a socially responsible citizen... This is one reason we decided to produce [the electric car] in the Flins plant," Ghosn said.

The fourth generation Clio is due to go into production in 2013.

Last year, the French government lent French carmakers billions of euros to help them cope with falling sales during the economic downturn, on the condition of carmakers keeping jobs in France.

Questions have been raised by the EU Competition Commissioner Neelie Kroes about whether these conditions restrict carmakers' ability to move their operations.

"The French government could still feel the ire of the EU Competition Commission for its actions as it will be questioned [on Monday]," said Ian Fletcher, auto analyst at IHS Global Insight.

France was the first to introduce a scrappage scheme in January 2009. It has now ended, helping car sales rise by more than 10 percent

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