
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, September 7, 1993                   TAG: 9309070115
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: New York Times
DATELINE: PARIS                                LENGTH: Medium

RENAULT TO MERGE WITH VOLVO JAN. 1

After two years of partnership and several months of negotiations that were concluded only on Friday, Renault of France and Volvo of Sweden announced Monday that they would merge on Jan. 1, forming the world's sixth-largest automotive group.

The merger, which had long been rumored and became widely anticipated over the weekend, is aimed at allowing the two companies to weather the severe recession buffeting the European automobile industry.

It will also strengthen them as they prepare for the tougher competition that will come when all restrictions on Japanese auto sales in the European Community are lifted in January 1999.

Sixty-five percent of the new group, to be known as Renault-Volvo RVA, will be owned by Renault and 35 percent by Volvo until Renault - currently owned by the French government - is partly privatized, perhaps as early as next year.

In 1992, the two companies produced a total of 2.45 million vehicles, had combined sales of about $37.5 billion and employed 200,000 people.

The group will continue to market cars and other vehicles under the Renault and Volvo brands, but they will merge their research, planning, production and distribution operations as well as their corporate structure. They predict that this will result in savings of $5.2 billion by 2000.

Measured by 1992 production, the new group would rank sixth globally after General Motors, Ford Motor, Toyota, Volkswagen and Nissan.

Within Europe, it would rank second after Volkswagen and ahead of Fiat and Peugeot and would have about 12 percent of the Western European market. Further, it is likely to be the largest industrial group in France and the 20th largest worldwide.

In Western Virginia, the Volvo GM Heavy Truck Corp. plant in Dublin employs about 1,400 workers and produces 60 heavy trucks a day. William Brubaker, the plant manager, said Monday evening that he had no information yet on how the Volvo-Renault merger would affect the plant's operations.

by CNB