French Accent

Renault buys a piece of AMC

It may be small, but it is nimble. Last week American Motors Corp., which produces only 1.83% of the nation's cars, swung a deal with Renault, the French-owned automaker, that should help it cope with the expected demand for small, gas-stingy cars. AMC will get $150 million from Renault, $50 million in credits, and the rights to build the French company's newly designed front-wheel-drive car starting in 1982. The U.S. firm would thus have an entry to challenge General Motors' X-body compact cars, which are now being marketed, and the new models that Ford and Chrysler are expected to put into dealers' showrooms. Said AMC Vice President Wilson Sick: "We just couldn't stay in the passenger-car business and meet the federal standards [for pollution control and gas mileage]. But Renault has the technology, it has an excellent product and [it has] the money."

In turn, by 1985 Renault will get a 22.5% interest in a company that, after teetering on the edge of disaster on and off for 25 years, is staging a modest rally, mainly because of the popularity of its reliable Jeep. In the nine months ended June 30, while Chrysler was sinking deeper into debt, AMC made a profit of $73.3 million, compared with $10.7 million in the same period a year earlier.

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