Renault in 'crisis' talks

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Renault SA is talking with potential partners, including Germany's Daimler, to cuts costs or boost volumes as it struggles to get its crisis-ravaged finances in better shape.

The French car company's chief operating officer Patrick Pelata said many discussions are taking place between carmakers, and that Renault is seeking partnerships to share research and development costs for vehicles, engines and transmission systems. 

He described talks with Daimler AG as ``serious'' but that the discussions were no further advanced than with other car makers and that there was no guarantee a deal will be struck. 

``We are speaking with a lot of people,'' he said during a meeting with journalists at the company's headquarters in the Paris suburb of Boulogne-Billancourt. 

``I can't say we are speaking more with Daimler than with others,'' he said. 

Renault is no stranger to link-ups with others _ it already shares development costs with Japanese partner Nissan Motor Co., in which it owns a 44 percent stake. 

Pelata said Renault's priority is to find savings through its alliance with Nissan and to help struggling Russian car maker AvtoVAZ, in which Renault has a 25 percent stake. 

AvtoVAZ is Russia's largest carmaker but has been losing money for years. It plans to lay off a quarter of its 102,000 workers. Renault has promised a euro240 million ($NZ483.4 million) contribution in technology transfers, production machinery and technological expertise. 

News of the potential partnership with Daimler comes as the industry emerges from the global recession, which has seen spending on big-ticket items, like cars, fall dramatically _ Pelata said revenue at Renault could be 17 to 18 percent lower this year compared with 2007. 

In the first half, Renault made a net loss of euro2.71 billion. Revenue dropped 24 percent to euro15.99 billion. 

Earlier this month cross-town rival PSA Peugeot Citroen said it is in talks with Mitsubishi Motors Corp. that could lead to a ``strategic partnership.''

- AP