BizAims

After the French government guaranteed to help the popular carmaker Renault, the company decided to transfer its car production back to its native country. Renault plans to continue developing its Clio Campus in the suburbs of Paris, shifting the production from Slovenia and thus creating 400 additional jobs in France. The statement was made by the French government minister.

At the same time the European Commission has ordered the French company to explain its goals regarding the plan to shift its production, considering the aim of Renault none either than protectionist. It is worth mentioning that in February the French government decided to offer Renault and Peugeot Citroen loans if the two companies will keep their car making plant open.

A lot of people accused of protectionism the plan to provide the two French carmakers 3billion euros ($4billion). The starting point of the row over protectionism was the statement of the French President Nicolas Sarkozy, in which he said that the money offered to Renault and Peugeot Citroen should not be used as bailout for French-owned plants located in Eastern Europe. The decision of Renault was officially announced by Luc Chatel, a junior minister for industry, in an interview given to the local radio station.

According to EU Competition Commissioner, Neelie Kroes, Mr Chatel promised several weeks ago that the help coming from the French government to the French carmakers would not have any connections to moving jobs to France. She said that in case the help turns out to be conditional, it should be paid back since, under the rules of the European Union, the shifting would be considered illegal.

However, Renault managed to defend its plans. Recently it stated that the company's factory in Slovenia worked at its full capacity and shifting it to the Flins plant, located in Paris, would allow Renault to cope with supplementary orders.

Last year the French government stated that it would provide 1,000 euros to those consumers, who had decided to trade in vehicles that were older than ten years for cars with low emission.

The spokeswoman for Renault, Natalie Bourette, noted that the company's decision to shift the production will not result in job losses at the Renault's car factory located in Slovenia, which assembles Twingo and Clio vehicles. She said that the plan would increase the Slovenian production of the Twingo model.

"Novo Mesto [the Slovenian plant] has no more available capacity, which is why we took the decision," she said. The company's claims were supported by the President of France Nicolas Sarkozy, who outlined that the move would increase the number of jobs for Flins, and would not lead to job losses at the Slovenian factory.

In the mean time the French carmaker looks forward to produce 8,000 Clio Campuses in its French factory in the period between June and October. The French factory mainly manufactures the newer Clio III vehicle.

It is worth mentioning that European car making companies were greatly affected by the global economic crisis. Renault's sales in Europe registered a 7 percent decrease, with the company abandoning its plans or 2009.