Lagardere Stops Avantime Production

PARIS February 26,2003; Dow Jones reported that French automaker Renault SA said Wednesday it " regrets" a decision by Lagardere SCA to shut down the assembly lines of its Matra Automobiles unit.

Matra builds the Avantime, an avant-garde upmarket sedan sold in Renault showrooms that has been a commercial flop.

Lagardere is indirectly blaming Renault for the "drastic" situation of its unit. The decision to shut down the Romorantin plant in central France will entail some 900 layoffs.

In a press release, Renault said it "takes formal note" of Matra's intention, which it said was "prompted by the level of Avantime sales which Matra considers insufficient to guarantee the long-term future of the company."

The car's launch was plagued by delays and final adjustment problems, Renault said.

Renault assured customers of the Avantime and the Renault Espace, which was assembled at Romorantin until production of the Avantime began, that they would still get full after-sales service throughout the lifetime of their cars.

In its statement announcing the shutdown, Lagardere said that Avantime sales in December 2002 had plunged to an average of 15 a day, or one-quarter of the number required to allow the plant to break even. The numbers were even worse than the most pessimistic forecasts.

Company Web site: http://www.renault.com