ANNUAL production of a new, low-cost Renault Group car for central European markets should be topping the half-million mark by the end of the decade.

Codenamed X90, the medium-size saloon is to be built in Romania by Dacia, the French company's subsidiary, from the end of next year.

Additional output has already been secured at plants in Russia and Iran, and the utility model could also be made in China, Columbia and Morocco, according to Renault chairman and chief executive officer Louis Schweitzer.

Due to be unveiled at the Paris Motor Show in September 2004, the three-box style model has been designed to meet all EU legislative requirements despite an entry-level target price of Euro 5,000 (£3,000).

'It is clear that people in a number of markets are not able to buy modern, reliable and affordable cars. Take Russia, for example. There is a choice between a $3,000 to $6,000 Lada and a $12,000-plus imported car, but there is nothing between,' said Schweitzer.

Also likely to appear at Paris is the small hatchback model that has been jointly developed by PSA Peugeot Citroen and Toyota. To be produced at 300,000 units annually from early 2005 at a new factory at Kolin in the Czech Republic, this is another contender in the race to provide transport for emerging nations.