Renault to produce low-cost Sandero car at Nissan's South African plant UPDATE

(Adds comments on Renault's weak performance in South Africa)

JOHANNESBURG (Thomson Financial) - Renault SA will produce its new low-cost Sandero car at the South African plant of its Japanese partner Nissan, executive vice president Patrick Petala announced.

Production in South Africa will start in 2009 at Nissan's factory located in Rosslyn, near Pretoria, he said.

Renault does not have any production sites of its own in sub-Saharan Africa.

Pelata declined to give any indications as to the price, production volume or investments costs for the Sandero.

The saloon car is due to go on sale for the first time next month, in South America, followed by a European launch in 2008.

Petala said the future production line in South Africa will supply countries where cars drive on the left, both in Africa and elsewhere.

He also said the company is having difficulties in the South African market. 'In South Africa, Renault is suffering and we are going to record a loss this year,' he stated without giving any figures.

'But we have decided to keep going because this market is strategic for our growth and because we have made errors that we think we can correct,' Petala said.

Renault currently has a market share of around 2.5 pct in the country and is forecast to sell about 10,000 units this year.

Car sales have grown rapidly in South Africa in recent years, supported by the emergence of a black middle-class. [e-mail] gt/rw/gt/lam COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.