Renault H1 vehicle sales drop in line with market

By Helen Massy-Beresford

PARIS (Reuters) - French carmaker Renault (RENA.PA) said vehicle sales fell 16.5 percent in the first half, matching the rate of decline in the overall market, though its business managed to generate cash.

Its sales of passenger car sales fell 13.7 percent, a slower rate than the global market, it said.

"It's not a surprise, but it's good news," said a Paris-based analyst.

Renault shares pared early gains of around 3 percent to trade up 1.6 percent against a DJ Stoxx European Autos Index .SXAP up 1 percent by 0826 GMT (9:26 a.m. British time).

Renault's larger rival PSA Peugeot Citroen last week said first half sales -- including completely knocked-down (CKD) kits sold for assembly in other markets -- fell 14 percent in the first six months.

European car sales rose 2.4 percent in June, but were down 11 percent over the first six months of the year, industry association ACEA said earlier this week. It linked the June increase to government cash incentives to drivers trading in old cars for new models.

A Renault spokeswoman would not say whether the free cash flow was above or below the level of 16 million euros it recorded in the first half of 2008. The group is due to report first half financial results on July 30.

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