Renault to invest $430 million to turn Turkish plant into export hub

ISTANBUL – Renault Group is investing 400 million euros ($430 million) to turn its factory in Bursa, Turkey, into an international export hub by adding four new models by 2027, starting with production of the third-generation Duster small SUV, a Dacia model that will be sold as a Renault outside of Europe.

The Duster will be followed by two SUVs in 2026 that will be based on the Renault Group’s new modular platform. Renault did not offer offer details on the fourth model, although it said the first three would be small or compact SUVs. 

The new production allocations are part of Renault 3-billion-euro ($3.2 billion) strategy to increase its business outside of Europe, especially following the closing of its operations in Russia last year. The plan aims to double revenue per vehicle sold outside Europe by 2027.

Turkey is one of five hubs in the plan, along with Brazil, Morocco, India and South Korea. 

The first model for global markets announced on the modular platform is the Kardian, a small SUV to be launched in Latin America and Morocco next year. In all, there will be eight models aimed at non-European markets, including five that are compact-sized or larger. Two models will be built on a platform developed with Geely.

The Bursa factory builds the Renault Clio small car and the Renault Megane sedan (a Turkish market model). In 2022, the plant assembled 206,000 Clios, most of which were exported to Europe, and 41,000 Megane sedans.

With the coming new models, cars built in Bursa will be exported to a total of 80 countries, including Asian former Soviet republics, the Middle East and North Africa. In addition to the new models, the factory will also build hybrid powertrain components that will be exported to Europe.

Renault did not give specific sales targets, but said adding models to Bursa would help fill unused capacity. The maximum capacity of the Bursa plant is 390,000 units per year; up to 40,000 additional units can be outsourced to a local partner.

Renault and its Turkish partner, Oyak, will invest more than 400 million euros in the new models and powertrains. Jan Ptacek, head of Renault Turkey, said at a news conference in Istanbul that Renault will double the engineering staff in Bursa to 500 people by 2025. 

Renault is also aiming to increase its market share in Turkey, a market with more than one million annual sales, but is subject to large swings in volume linked to the country’s volatile economy. 

Fabrice Cambolive, CEO of the Renault brand, said the goal was to be the leading brand in Turkey by expanding SUV offerings. Fiat is the most popular brand in Turkey, with a 14.6 market share though September. Renault is in second place with an 11.3 percent share.

Eight of the 10 most popular nameplates are assembled in Turkey, where SUVs are gaining popularity despite buyers’ traditional preference for sedans. Ptacek said that the SUV share of the total Turkish market rose to 50 percent in 2023 from 21.5 percent in 2018. 

Another growth lever for the Renault brand will be the electrification of the product range with hybrid and battery electric vehicles, Cambolive said. Renault said electrified vehicles (hybrid and full-electric) will account for one third of its sales in Turkey by 2027.

Starting from near zero, the market for EVs has boomed in Turkey in the past two years, in part because of favorable tax rates.

The market share of full-electric vehicles was 8 percent in November, and 5 percent from January to November. Renault’s main EV offering, the Megane E-Tech, had sales of 2,500 units through November this year, with 600 sold in November alone.