While Algiers Still Negotiates, Renault Launches its Factory in Tangier
8 February 2012
Read by 1477 persons
Thursday, Renault is opening a production site in Tangier (Morocco) that is expected to employ 6,000 workers by 2015, with a goal of producing 340,000 vehicles each year.
After the Logan, the Sandero and the 4X4 Duster, Renault will market the Lodgy minivan as well as a utility vehicle and another car, whose profile and name are still secret. Assembling vehicles in Tangier will bring 800 euros to France per car produced: 400 euros in parts delivered and 400 euros in engineering. Renault wants to counter the preconceived notions about French production and producing in France. Carlos Tavares, the chief operating officer of the French car manufacturer, believes that the future production of vehicles by Renault in Morocco will generate activity in France. This is a difficult message to convey at a time when France has an unemployment rate nearing 10%.
Let's be clear. What Renault is not saying is that it has abandoned France to produce more cheaply in European or North African countries. Countries where workers are paid up to five times less than in France and where, therefore, manufacturing costs much less. The low-cost shift began seven years ago with the launch of the Logan. Today, low-cost cars account for 2.72 million units sold worldwide by Renault. It was Louis Schweitzer, after a trip to Russia, who decided in the early 1990s to develop a robust vehicle for 5,000 euros. His vision, iconoclastic at the time, is now fully implemented by Renault.
Thus, the diamond group is to inaugurate its new site in Tangier on Thursday, which will be its second base (the first in Africa) alongside Romania, for the manufacturing of low-cost vehicles sold in Europe and the Mediterranean region. Knowing that the Dacia factory based in Romania alone supplies 47 countries in Europe and around the Mediterranean, the Tangier factory will also export to Africa and beyond. For now, Renault is very discreet about the details of its Moroccan project. In order to avoid controversy? Yes, French unions are watching their jobs slip through their fingers and factories close one after another; announcing the opening of a factory elsewhere than in France will not please them. Of course, Renault had pledged to maintain employment in France when it received three billion euros in government loans in 2009 to cushion the effects of the crisis. There have been no layoffs or plant closures, but many negotiated departures and a gradual decline in activity. A soft landing in France to better take off elsewhere. But at the rate of relocation, it is clear that there will be factories that will see their activity reduced after the opening of the Tangier site.
One billion euros investment in Morocco
The car manufacturer is to invest one billion euros in this factory, where initially between 150,000 and 170,000 vehicles per year will be produced on an assembly line. A second line is planned from 2013 to increase annual production to 340,000 units, or even 400,000 by working weekends. This would make it, in terms of capacity, equivalent to the sites of Flins (Yvelines) or Douai (Nord) in France.
"It is low-priced vehicles that allow us to generate profit," defended Mr. Tavares, who argued that the company "is very fragile in terms of its profitability."
But then, with all this said, the French unions on edge seeing foreign factories taking their jobs, the performance of Dacia and the Tangier factory, one wonders about the viability of Renault's project in Algeria. Certainly, despite the soothing statements of the very political Jean-Pierre Raffarin or Minister Mohamed Benmeradi, nothing is clarified. For several months, French delegations have been traveling without any precise announcement being made. It is obvious that the subject is sensitive in France. At the time of the French presidential election, where the debate on French production is in full swing, where political maneuvering is back in full force, announcing to French voters the construction of a Renault factory in Algeria will have consequences for President Sarkozy. So negotiations are dragging on, while waiting...
Yacine K.
Lematindz.net
Published February 8, 2012.
Posted online February 8, 2012.
After the Logan, the Sandero and the 4X4 Duster, Renault will market the Lodgy minivan as well as a utility vehicle and another car, whose profile and name are still secret. Assembling vehicles in Tangier will bring 800 euros to France per car produced: 400 euros in parts delivered and 400 euros in engineering. Renault wants to counter the preconceived notions about French production and producing in France. Carlos Tavares, the chief operating officer of the French car manufacturer, believes that the future production of vehicles by Renault in Morocco will generate activity in France. This is a difficult message to convey at a time when France has an unemployment rate nearing 10%.
Let's be clear. What Renault is not saying is that it has abandoned France to produce more cheaply in European or North African countries. Countries where workers are paid up to five times less than in France and where, therefore, manufacturing costs much less. The low-cost shift began seven years ago with the launch of the Logan. Today, low-cost cars account for 2.72 million units sold worldwide by Renault. It was Louis Schweitzer, after a trip to Russia, who decided in the early 1990s to develop a robust vehicle for 5,000 euros. His vision, iconoclastic at the time, is now fully implemented by Renault.
Thus, the diamond group is to inaugurate its new site in Tangier on Thursday, which will be its second base (the first in Africa) alongside Romania, for the manufacturing of low-cost vehicles sold in Europe and the Mediterranean region. Knowing that the Dacia factory based in Romania alone supplies 47 countries in Europe and around the Mediterranean, the Tangier factory will also export to Africa and beyond. For now, Renault is very discreet about the details of its Moroccan project. In order to avoid controversy? Yes, French unions are watching their jobs slip through their fingers and factories close one after another; announcing the opening of a factory elsewhere than in France will not please them. Of course, Renault had pledged to maintain employment in France when it received three billion euros in government loans in 2009 to cushion the effects of the crisis. There have been no layoffs or plant closures, but many negotiated departures and a gradual decline in activity. A soft landing in France to better take off elsewhere. But at the rate of relocation, it is clear that there will be factories that will see their activity reduced after the opening of the Tangier site.
One billion euros investment in Morocco
The car manufacturer is to invest one billion euros in this factory, where initially between 150,000 and 170,000 vehicles per year will be produced on an assembly line. A second line is planned from 2013 to increase annual production to 340,000 units, or even 400,000 by working weekends. This would make it, in terms of capacity, equivalent to the sites of Flins (Yvelines) or Douai (Nord) in France.
"It is low-priced vehicles that allow us to generate profit," defended Mr. Tavares, who argued that the company "is very fragile in terms of its profitability."
But then, with all this said, the French unions on edge seeing foreign factories taking their jobs, the performance of Dacia and the Tangier factory, one wonders about the viability of Renault's project in Algeria. Certainly, despite the soothing statements of the very political Jean-Pierre Raffarin or Minister Mohamed Benmeradi, nothing is clarified. For several months, French delegations have been traveling without any precise announcement being made. It is obvious that the subject is sensitive in France. At the time of the French presidential election, where the debate on French production is in full swing, where political maneuvering is back in full force, announcing to French voters the construction of a Renault factory in Algeria will have consequences for President Sarkozy. So negotiations are dragging on, while waiting...
Yacine K.
Lematindz.net
Published February 8, 2012.
Posted online February 8, 2012.
