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French car production has fallen sharply, a new report has shown. News of the slowdown comes only a day after Mercedes's plans to cut production in the face of slowing global demand, and provides further proof that Europe's car makers are facing an increasingly tough business climate.

Citroen has weathered the storm best, helped by its aggressive pricing strategy and a recently refreshed model line-up, with output slipping by just 1 per cent last month compared to the same period last year.

Sister brand Peugoet has suffered worse sales, posting a 5 per cent fall in year-on-year volume, while Renault's production has fallen by more than a fifth.

Renault has been hit by disappointing sales for the new Laguna along with slowing demand for the Espace and Vel Satis (which is still sold in Europe).

The current Renault Megane is also running out to replacement, further depressing the figures. The company is considering reducing production at the Sandouville plant, which produces the Laguna, Espace and Vel Satis, to just one shift.

Despite the sliding sales, Renault boss Carlos Ghosn has said he is confident that the manufacturer will meet its operating profit target for this year.

Hilton Holloway

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