The new production line will increase the plant’s capacity to 340,000 vehicles per year from 2014. The investment amounts to 400 million euros, and will be dedicated to the Sandero and Sandero Stepway. Renault’s plant in Morocco was conducted in a public-private partnership, and is the largest automobile manufacturing plant in Africa. Renault owns 52.4 percent of the company that owns the factory.
The factory was inaugurated last year with the production start of the Lodgy and Dokker nearly 6 years after first signing letters of intent between the Kingdom of Morocco and Renault, and approximately 3 years after the onset of the works. In June this year, the 100,000th unit car was manufactured.
For the new line were 1,400 people were employed, raising the total number of employees is now at 5,000. Production site covers an area of 300 hectares, and work is done in two shifts. Dacia plans to continue production of the Sandero at it largest plant, which is in Pitesti, Romania, where the maximum capacity is 400,000 vehicles a year.
The subcompact is Dacia’s best-selling model in Europe, where sales for the car are up 59 percent to 79,586 units compared to last year, according to JATO Dynamics.
Michel Costes, analyst for Inovev, declared for Automotive News Europe that the Tangier expansion was intended primarily to prevent a production bottleneck in Pitesti. The growing demand for low-cost Dacia models means “there simply is not enough capacity at the Pitesti site to produce the Sandero as well as the Logan,” Costes said.
Renault picked the Tangier site because it has the advantages of low-cost labor and is close to Renault’s key markets in Europe. “Labor costs are 50 percent lower in Tangier than they are at the main Dacia plant in Romania”. On top of low labor costs, Renault also benefits from other advantages, like the exemption of taxes on companies for five years followed by a reduced rate, or the absence of export taxes.
According to Costes, switching a part of the Sandero production to Tangier from Pitesti will also aid in maintaining future production at the Moroccan plant when the demand for Dacia Lodgy goes down.
Meanwhile, Renault has started a project for building a plant in Oran, western Algeria, but the plant will be small in size, given that production will not exceed 75,000 vehicles per year, and will be meant for the local market.
Renault also builds the Renault Kangoo, Sandero, and Logan for the Moroccan market from kits at a separate plant in Casablanca.
Jacques Prost, country director for Renault, told AFP that the plan to double production by next year had “no equivalent” in Africa. Prost defended this decision by saying the manufacturing of “this type of car can only be done in this type of factory”.