Renault will build the next Nissan Micra at its plant in Flins, near Paris, in an effort to use excess capacity in its home country.
Production will begin in 2016 at an estimated annual volume of 82,000 vehicles, Renault said today in a statement.
Renault promised to increase domestic production by about a third, or 180,000 vehicles, by 2016 in return for labor concessions obtained last month including wage restraint and longer hours.
Renault wants to raise capacity utilization at its French sites to 85 percent by 2016 from 60 percent to 65 percent percent currently, Raluca Barb, a spokeswoman at the carmaker, said.
Nissan, which is 43 percent-owned by Renault, said in a separate statement that the Micra built at Flins will be sold across Europe. The carmaker's other plants are already at full capacity with no space for the new model, it said in a statement.
Nissan transferred Micra production from its plant in Sunderland, England, to Chennai, India, in 2010 to free up capacity for the Juke subcompact crossover. The Chennai factory, owned by the Renault-Nissan, will continue to produce the current version for the Micra and will also manufacture the next generation beginning in 2016, Nissan said.
The Micra was Nissan's No. 3-selling model in Europe in the first quarter, after the Qashqai and Juke, with sales of 13,000, down 45 percent from the year before, according to JATO Dynamics.
The Flins factory currently builds the Clio and Zoe subcompacts. The Micra shares a platform with the Clio. The next-generation Micra will share even more parts with the Clio, French newspaper Les Echos reported today. A Renault spokesperson told Automotive News Europe it is too early to say what components the two models might share.
"This announcement is good news for Flins, but also for all Renault plants in France," Renault-Nissan CEO Carlos Ghosn said. "Renault is in line to fulfill its commitments."
Ghosn had previously threatened to move some Renault production out of France if no deal was reached with unions. As part of the agreement, he pledged to repatriate models including the Trafic commercial van from Spain to Sandouville in northern France. Some versions of the Clio will also return to Flins from Turkey, the company has said.
