Renault plans EUR 420m investment in French factory

(PARIS) - Auto giant Renault said Wednesday it plans to invest 420 million euros (530 million dollars) at its factory in Douai in northern France to develop its activity in the upper end of the car market.

Chief operating officer Carlos Tavares said the Douai plant will spearhead Renault's drive to reconquer market share in this segment.

"It's an enormous challenge," he said.

Tavares also said the company was spending 230 million euros to relocate production of its Trafic van from Barcelona, Spain, to a French plant at Sandouville.

Renault and other European carmakers are bracing for a tough year in 2012, with the European market where Renault sells the bulk of its cars expected to contract by 3.0 percent compared with 2011.

But Carlos Ghosn, the head of Renault's alliance with Japanese carmaker Nissan, said Tuesday the firms would achieve another sales record this year after a 10 percent jump in global sales to 8.03 million vehicles in 2011.

With a host of fresh products and demand set to grow in all markets except Europe, both the Japanese and French carmakers should continue to expand sales beyond the records set in 2011, he said.

Nissan, Japan's second-biggest automaker, is 44.3-percent owned by Renault.

--- Dow Jones contributed to this news story ---