September 28, 2012

Renault COO warns of lasting Europe car slump

European car markets are headed for a lasting slump and may take three to five years to return to pre-crisis levels, Renault (RENA.PA) Chief Operating Officer Carlos Tavares said on Friday.

"We are not certain to have touched bottom yet. We are now stuck in a situation that could last," Tavares told BFM radio.

European automakers are struggling to cope with a glut of excess capacity amid a sustained market decline.

Tavares told Reuters on Thursday that Renault, faced with a sustained slump in European auto demand, would ask French unions for a new nationwide deal on pay and conditions to avert plant closures and mass layoffs of the kind announced by troubled rival PSA Peugeot Citroen.

Renault Chief Operating Officer Carlos Tavares addresses reporters on media day at the Paris Mondial de l'Automobile September 27, 2012.

Renault will ask unions to begin negotiations to align French labor and production costs with factories in Spain and the UK, Tavares said in an interview at the Paris auto show.

(Reporting by Dominique Vidalon; Editing by Helen Massy-Beresford)

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