Matra Automobile will be sold next year by parent company Lagardere Group, the French defense and media conglomerate.
Matra makes the Espace minivan for Renault and will soon start building Renault's new luxury coupe, the Avantime.
Lagardere Group co-chairman Arnaud Lagardere said efforts would be made to list Matra on the stock market. If that failed, a partner for Matra would be found.
'Lagardere will no longer be linked to the automotive industry,' he said. 'During 2001 we will find a solution for Matra through the stock market if the markets make it possible. If not, we will find another partner.'
The announcement surprised Matra Automobile executives. For several months, CEO Philippe Guedon has sought a listing for Matra in which Lagardere Group retained a minority stake.
But Lagardere is now considering a more radical solution which could lead to a sale.
'Italian or British coachbuilders are possible future partners,' said a Paris-based analyst.
But there could be problems finding a buyer. One industry source said: 'Matra's body-manufacturing technology, using an iron cage and composite panels, such as it uses for the Espace, is expensive. To change to a more standard process would mean new investment.'
Matra officials say the company's Romorantin, France, plant, which has 2,000 workers, can combine different manufacturing technologies.
'Matra must find new products besides Avantime,' said the analyst.
Production of the current Espace will stop in 2002. Avantime production, due to start later this year, will not be enough to balance the lost Espace business.
From its launch in 1984 to the end of 2000, Matra will have made about 780,000 Espace models in three different generations. Between 300 and 350 Espaces are produced a day.
The Avantime has been scheduled for a daily rate of 60 to 80 units.
To ensure the future of Matra, company officials say at least two other models will be needed.
Matra says it has plans for new models.
'We are going to make three or four models, each at a daily rate of 100 units,' said Jean-Louis Caussin, Matra Automobile vice president. But he would not give any details of the models.
One could be the M72, a small roadster that debuted at the Paris auto show. It could be sold by the Renault network under the Matra brand.
A second project could be a new Renault model. Industry sources say it could be a compact luxury minivan that would compete with the Mercedes-Benz A-class.
Said a Matra insider: '(Renault Chairman) Louis Schweitzer will certainly not drop Matra overnight.'
Lagardere Group owns a 1.5 percent stake in Renault.