Paris - French car maker Renault saw its profits plunge in 2008 after posting a huge loss in the second half of the year, the company said on Thursday.

Profits for last year totaled 571 million euros (735 million dollars), down 78.6 per cent from 2007, Renault said in a press statement.

The profit downturn was the result of a shrinking car market in the second half of 2008, when Renault posted a loss of 980 million euros.

Turnover for the year fell by 7 per cent, to 37.79 billion euros, as sales of Renault vehicles dropped by 4.1 per cent "in a world market that shrank by 5 per cent," the company said.

Earnings per share dropped by 78.4 per cent, to 2.32 euros. As a result, the Renault board of directors has recommended that no dividends be paid to shareholders on 2008 earnings.

Renault said that it expects market conditions to worsen in 2009. Therefore, the company's priority "is to secure liquidity," company head Carlos Ghosn said.

On Monday, President Nicolas Sarkozy announced that the government would extend Renault a loan, at favourable rates, of 3 billion euros over five years on the condition that the company does not outsource production or sack employees for the period of the loan.

The aid - which was also extended to the other large French car maker PSA Peugeot Citroen - has been widely criticized as being protectionist and is being closely examined by the European Commission. (dpa)