Renault begins Lodgy production in Morocco, targets Europe
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PARIS -- Renault has opened its new Dacia plant in Tangiers, Morocco. The factory will build the Lodgy minivan and an as-yet unnamed model for European and other markets.
The plant will have a annual capacity of 400,000 units by 2013 and will export 85 percent of its production to Europe, Africa, Mexico, and Middle East.
Europe, Dacia's biggest market, will take most of the vehicles.
The Tangiers facility complements Dacia's factory in Pitesti, Romania, which Renault said is at full capacity and will not produce the Lodgy.
A Renault spokesperson would not comment on output targets at the new facility, where Renault will also produce a new commercial van based on a Dacia platform in addition to the Lodgy, which it goes on sale later this year.
The plant's opening has generated a stir in France with critics accusing Renault of transferring jobs outside of the country, while ignoring the fact that the French government owns a 15 percent stake in the automaker.
'Dangerous development'
"We see this factory as a dangerous development," said Fabien Gache, a spokesman for the CGT, Renault's dominant French union. "These vehicles are basically 'Loganized' Scenics and Kangoos," Gache said. "They're bound to hit the Renault brand's market share."
Renault said it has always based production of its low-cost Dacia brand cars outside of western Europe as part of its no-frills business model.
"The question of building this factory in western Europe didn't even arise," Renault CEO Carlos Ghosn said in a radio interview ahead of the plant opening ceremony on Thursday. "That would have been incompatible with the concept" of low-cost vehicles, he said.
Renault hopes the Lodgy will build on the success of its Dacia division. The estimated 10,000-12,000 euro entry price for the Lodgy, available in five- or seven-seater versions, compares with French prices starting from around 21,000 euros for a Renault Scenic or Volkswagen Touran, excluding special offers.
The Lodgy builds on the surprise domestic success of Renault's low-cost Dacia brand. The original 2004 Logan sedan proved more successful in Europe than in many of the emerging markets for which it was designed, such as India. Dacia's Duster SUV has since become a runaway hit in France.
Western European sales of Renault models dropped 8.5 percent in 2011, outpacing the region's overall 1.3 percent decline in car registrations, while Dacia increased its market share.
Renault's low-cost entry vehicles, sold as Dacias in Europe and Renaults elsewhere, increased their share of group deliveries to one-third last year from about a quarter in 2010 - even after the withdrawal of government crisis incentives that favored cheaper cars.
Reuters contributed to this report.
You can reach Bruce Gain at bgain@crain.com.
