American Motors Corp. could begin producing Renault automobiles in this country as early as 1980 if a proposed cooperation agreement between AMC and the French government-owned auto firm is concluded successfully, officials of the two companies said yesterday.
Most likely, AMC will initially assemble Renaults from French-produced parts, Bernard Hanon, executive vice president of Regie National des Usines Renault, indicated.
AMC President Gerald C. Meyers said that consideration has already been given to starting U.S. production with the Renault R-18, a four-cylinder, 4-door, 5 passenger vehicle that is two weeks from introduction in Europe.
Meyers also expressed hope that AMC dealers could start offering Renault's economy-sized Le Car by this fall.
Before that, however, a final agreement must be hammered out between the ailing No. 4 U.S. auto manufacturer and Renault, Europe's leading car maker. With a miniscule marketing presence in this country, Renault is seeking to expand sales significantly through AMC's 2,100 dealers.
Officials of both companies appeared at a press conference here yesterday following announcement Friday at a manufacturing and marketing "arrangement" in principle.
Meyers said the arrangement represents "a unique fit."
"American Motors looked hard for an automotive partner that could come close to being a perfect match for our corporation and with whom we could face the future," Meyers said. "And we have found it in Reanult."
In one crucial area AMC will get no immediate help. Officers of both companies stated that no cash investment by Renault in AMC is contemplated, at least initially.
Costs of any retooling or overhual of assembly facilities will have to be borne by American Motors, which in recent years has been extremely strapped for cash and has appealed to Washington for backing on a $100 million loan. Purpose of the loan: to gear up for the production requirements of the 1980s, when the government is demanding increased fuel economy.
Meyers said the proposed Renault arrangement will not change AMC's need for federal assistance in obtaining future financing.
"Those needs and those monies are still desired, and will be pursued to a conclusion," he said, adding that the Renault arrangement and the $100 million loan were separate matters. Meyers said "meetings are coming up" in Washington on the company's long-standing request.
That raised the question of how AMC will meet its near-term financing needs.
The AMC president said that the company, which has been losing money on its passenger-car operations with only two percent of the U.S. market and has turned slender profits only because of its popular Jeep model and its bus sales, expects the higher volume of car sales from the Renault arrangement to increase the amount of cash it will generate internally.
AMC will receive some unspecified financial compensation from Renault for sales of Le Car through its dealer network.
While Renault is state-owned, both executives said negotiations were not affected by the recent French elections, although Meyers called the outcome "an encouragement for business and this relationship, too."
AMC and Renault have a relationship stretching back 20 years. In the 1960s Renault assembled and sold AMC Ramblers in Europe. But serious discussion about affiliation did not begin until February, when Hanon approached AMC after statements made at the company's annual meeting. Since then, officials of both companies have conducted intensive transatlantic discussions.
"That Concorde is a great shuttle," said Meyers of the French supersonic-speed transport plane. "What a great commuter train."