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Renault cost-cutting to be intensified after profit warning

Renault has issued its second profits warning in five months, saying that operating margins in the second half of this year could fall below the 1.6% level achieved in the first six months of 2001.

In a statement issued today the company said: “Despite an increase in revenues generated by the other activities of he automobile division (network business, used cars), third-quarter revenues grew slower than expected. Against this background, operating margin in the second half could be lower than in the first half of the year.”

As a result Renault expects net income for the full year to be “on a par” with the previous year.

“Cost-cutting will be intensified and non-priority investments significantly reduced,” the company said.

In the year-to-date Renault's consolidated revenues came to 271 billion euros (£16 billion), up 6.8%. In the third quarter they stood at 8.2 billion euros (£5.2 billion), a rise of 9.7%, with 9.6% for the automobile division, 12.6% for the finance division and 7.5% for other operations.

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