French giant car maker Renault said today it will cut about 5,000 jobs in Europe among measures to reduce costs by 10% as it prepares for a sharp and possibly rocky downturn. Renault employs 47,000 people in Europe.
'We can see in the second half of this year and going into 2009 a sharper slowdown on the European markets', Renault chairman Carlos Ghosn said. 'Renault must be prepared for a period ahead which risks being turbulent,' he added.
Ghosn said the company, which controls Japan's Nissan, now expected 2009 global sales of three million vehicles, down sharply on the previous estimate of 3.3 million. Sales growth this year was revised down to 5-10%.
Renault will also raise the prices of its vehicles to match a rise in raw material costs. Non-essential projects would be frozen or delayed and recruitment in Europe would be frozen.
Renault put net profit for the six months to June - excluding the Nissan operations - at €1.47 billion, up from 41.07 billion the same time last year. Sales rose 2.3% to €20.94 billion, with the operating margins increasing to 4.1% from 2.8%.
Volkswagen, Europe's biggest carmaker, alongside Peugeot Citroen of France and Italy's Fiat yesterday reported a robust performance as they benefited from strong overseas sales but they all cautioned about a less certain outlook.
Analysts have been warning that European car companies could be badly hit by the slowdown in their home markets, making them much more dependent on sales overseas, especially in China.
