Renault Morocco car plant expanded

2013-10-08 22:26

Melloussa - Renault on Tuesday inaugurated the second phase of its giant low-cost car factory in Morocco, whose opening last year sparked anger in France, amid opposition to the so-called "delocalisation" of manufacturing.

The second stream at the plant outside Tangiers, which will produce the Dacia Sandero model, will allow the French carmaker to double output at what it says is the biggest factory of its kind in Africa.

Production is due to reach 340 000 vehicles in 2014.

Renault has also launched a project in Oran, in western Algeria, but the planned factory there is smaller, with an expected annual output of 75 000 cars destined for the local market.

Jacques Prost, the company's country director, and Morocco's industry minister Abdelkader Amara inaugurated the second production line at the Renault-Tanger plant, which cost some €400m.

Total investment in the Moroccan factory, which currently employs 5 000 people, now stands at around one billion euros.

Prost told AFP the plan to double production next year had "no equivalent" in Africa.

The plant, built in a customs' free zone in Melloussa, some 30km from the port of Tangiers Med, is seen by Renault as a future hub.

Japanese carmaker Nissan is hoping to join Renault for a planned third phase of the project, but no details have yet been announced.

The Renault-Tanger factory is mainly geared for export (nearly 90%), already supplying more than 25 countries, most of them European.

Dominates market

In Morocco, Renault dominates the market, through its Romanian subsidiary Dacia, with more than a third of sales.

Setting up in Morocco has reaped rewards for the company, which has benefited from cheaper labour, tax breaks and customs exemptions.

The plant was opened in February last year by Renault chief executive Carlos Ghosn and Morocco's King Mohammed VI, as a political storm raged in France, during the presidential election campaign that incumbent Nicolas Sarkozy eventually lost.

The so-called "delocalisation" of manufacturing, particularly in the auto industry, is a highly contentious issue and has fuelled debate about the uncompetitiveness of French industry.

Voices on the left and right of the political spectrum have criticised "social dumping" in Morocco, or using the North African country's cheap labour to boost profits, with France's far-right National Front calling the factory "a real scandal".

On Tuesday Prost defended Renault's decision, saying the manufacturing of "this type of car can only be done in this type of factory".

"Once again, we need to find clients, and at a good price... But as you know, since the inauguration Renault has also made big commitments in terms of boosting competitiveness in France."

Average monthly salaries at the plant when it was first inaugurated were in the order of €250, representing about half the cost of labour at the Pitesti factory in Romania.

"A 24- or 25-year-old worker trained by us earns about 15% more than the average income in the region," factory manager Tunc Basegmez said on Tuesday.

The industry minister welcomed the benefits the plant has brought to Morocco, saying it had given a boost to the "whole region".

Renault says it has indirectly created work for 30 000 people, in a country where unemployment remains a pressing social problem, with nearly 30% of young people out of work, according to some estimates.

  • Likeitis - 2013-10-08 23:10

    Well done Morroco.

  • Michael Tetley - 2013-10-08 23:21

    I wonder why the most industrialized and developed economy in Africa was not chosen, i.e. South Africa? Any ideas ANC, Cosatu, SACP?

      Nthokolose Puleng Marope - 2013-10-09 00:39

      It shows you are in favour of cheap labour.

      Likeitis - 2013-10-09 05:55

      BMW says they have had enough. They do no intend investing anymore in South Africa. Toyota also say they have had enough.

      Brutus Roy - 2013-10-09 06:37

      Michael, they would have no idea, if they were to comment they would say they will not be blackmailed.

  • Japtha Mothibedi - 2013-10-09 05:56

    It shows they are only after profit,that's why they never comes to RSA.Young person earning €250 or R3396 is a real bargain for renault.

      Brutus Roy - 2013-10-09 06:42

      Japtha, so why does any person or entity go into business or expand it's business? To be profitable and viable. Why don't you start your own business, moron.

  • Terrence Sileisi - 2013-10-09 06:04

    The useless strikes is affecting SA, the BMW wantanted to do so in SA... n for that matter BMW wouldn't be that expensive, so the that playboy-Jz to to something about the protracted strikes lest SA loose more

  • Joe Gomes - 2013-10-09 06:11

    We need to lead Africa with the best paid work force, only problem is that there won't be any work for it!!!!

  • Japtha Mothibedi - 2013-10-09 06:18

    Renault has set the trend,next is bmw which said labour in RSA is expensive.If is like that is bad for automotive,which contribute about 15% of GDP.nou wat jim?

  • Mike Peach - 2013-10-09 08:43

    Some people simply have no idea how business works.

  • Michel Konings - 2013-10-09 08:54

    North Africa is ideal, close to the markets in Europe and competitive labour cost, stable workforce.

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