PARIS (AP) _ French carmaker Renault SA said Wednesday that its first-half earnings fell 20 per cent as car sales in Europe dropped and exports were hurt by the strong euro.

Chief executive Carlos Ghosn is trying to turn around Renault and sister company Nissan Motor Co. with the launch of new models.

Net profit fell to 1.32 billion euros (US$2.79 billion) from 1.65 billion euros a year ago. Sales fell 1.4 per cent to 20.56 billion euros ($28.26 billion).

The operating margin rose to 3.5 per cent of revenues compared with 2.8 per cent a year earlier. Renault attributed the gains to cost controls and sales outside Europe.

The results are in line with analysts' forecasts.

A poll by Dow Jones Newswires had forecast net profit at 1.31 billion euros ($1.81 billion) and an operating margin of 3.1 per cent.

Last year, he called 2006 a ``year of transition'' and introduced a target of a 3 per cent operating margin for 2007.

Renault said Wednesday it is sticking with this target.

Ghosn is pinning his hopes on the rapid expansion of the low-cost Logan sedan _ launching this year in India, Iran and Brazil _ as well as the launch of a new Twingo super-mini and Laguna upscale sedan in the final quarter.

Nissan said Tuesday its April-June quarter profit fell 16 per cent because of higher material costs and a shift among consumers away from trucks and other vehicles that deliver heftier profits.

Ghosn said the Tokyo-based automaker promised revival with models that have rolled in showrooms recently, such as the Altima and Infiniti G35, and more models in the pipeline. Nissan is launching 11 new global products this year.

Renault shares closed down 3.5 per cent at 108.10 euros ($148.56) in Paris.