PARIS - Renault has slashed production targets at its new plant in Curitiba, Brazil, as a result of the country's economic crisis.
Company sources say Renault will make 20,000 cars this year at the new plant instead of the 30,000 originally planned. Renault planned to make 22,000 Scenics and 8,000 Clios in 1999. 'The target is now 16,000 Scenics and 4,000 Clios,' said a Renault insider.
Scenic production started in late November and is running at about 50 units daily. Clio production is scheduled to begin this summer. Scenics are sold in Brazil and Argentina. Clios will be sold mostly in Brazil.
Renault has cut its 1999 sales forecast in Brazil to 33,000 units. Last December, Renault said it planned to sell 40,000 units this year, 80,000 in 2000, and 120,000 in 2001.
Meanwhile, Renault announced plans to open a $120 million engine plant in Curitiba in early 2000. The plant will make 1.6-and 1.0-liter gasoline engines initially, and later 1.8- and 2.0-liter gasoline and diesel engines.
Brazil's auto industry has been in a slump that started with Asia's economic crisis in 1997. Car sales continue to decline in 1999, after plunging 26 percent in 1998 to 1.4 million units. Sales were down 25 percent in the first quarter.
The crisis has also affected other carmakers. Ford has announced that it would not go ahead with plans to build a $200 million plant in Guaiba, Rio Grande do Sul state.
The decision came after governor Olivio Dutra decided to hold back a grant for infrastructure improvements at the plant site.
DaimlerChrysler began A-class production in late April at its plant in Juiz de Fora. But the initial target - 40,000 units this year and 70,000 in 2000 - now appears optimistic.
'We will not be using anywhere near the capacity of that plant,' said D/C Co-chairman Robert Eaton.