With declining sales in the European automobile, French car maker Renault has announced it would cut 6,000 jobs through voluntary redundancies, of which 4,900 will be in France and 1,100 in other European countries.

In a bid to evade being a fatality to consolidation, Renault feels the job cuts are unavoidable if productivity targets need to be met, so as to keep the company competitive in a worsening economic environment.

The cuts represent about 3 per cent of the company's nearly 130,000 employees of which 41,700 are employed in France.

Its Sandouville plant in western France, which makes the key top-line Laguna model, will bear the brunt of the job cuts, where one thousand people will be laid off.

The labour unions have protested about the job cuts by calling a one day strike and have appealed to President Nicolas Sarkozy to intervene, as the state owns a 15.01-per cent stake in te car maker.

Due to the global economic slowdown and the rise of fuel prices to unprecedented highs, Europe has seen a slack in the demand in car sales, notwithstanding the rise in price of raw materials such as steel and plastics among others, forcing Renault to resort to the drastic cost cutting through elimination of jobs.

In July, Renault reported a 37-per cent increase in six-month net profit but said it was falling behind sales targets. According to the European Automobile Manufacturers' Association, Western European sales fell 2 per cent in the first six months of the year.

The jobs cuts are designed to help Renault meet its profit targets, which have fallen from 3.4 billion euros in 2005 to a projected 2.5 billion euros for this year.
Analysts say that the job cuts should help Renault reduce costs by around 175 million euros.

Renault has also trimmed its estimated vehicle sales figures from its original estimate of 3.3 million to 3 million.

Renault's share price has fallen more than 40 per cent since the beginning of the year, compared to the 24 per cent of France's index of major companies for the same period.

Renault chairman Carlos Ghosn, known as a star manager, is known to be an expert at restructuring after having impressively turned round Nissan, Renault's Japanese partner.

Analysts feel that Ghosn should have taken this step three years ago when he joined Renault, as this is exactly what his rival, Christian Streiff did at Peugeot.

The company is investing 1.8 billion euros, in its new 'Megane' compact hatchback which it plans to introduce at the Paris Motor Show in October.