The new Renault Clio will continue to be a premium supermini and won't go toe-to-toe with cheaper rivals from Hyundai and Kia.
Renault has decided that the new car will be built in France, even though the car could have cost less to build elsewhere.
Initial estimates predict a current French-built Clio costs around €1200 (£970) more to make than it does in Turkey - a huge penalty over thousands of vehicles, and one that the cash-strapped brand could do without.
However, speaking at the Goodwood Festival of Speed last weekend, Renault's chief operating officer Carlos Tavares said that the next generation of Clio - due to be unveiled this week - would continue to be made at Flins in northern France.
'There is a gap of around €1200 between French and Turkish cars,' admitted Tavares, 'but less than half of that is actually the labour. The rest comes through the overall performance of the factory, the logistics, supplier costs and so forth. So for me I've told them [French staff] that I can live with the €500 gap in labour costs, but that they have to work hard, and fast, on getting the rest of the difference removed.
'Our European factories don't need to beat the Indians or the Koreans on costs. What they do have to do - and I've told them this - is beat the rest of the Europeans. That's a realistic goal, but a tough one.”
Tavares declined to comment on whether pressure from the French government - which owns 15% of Renault - had played a part in the production decisions.
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