The fact that Renault will manufacture Dacia models in the three plants is not bad but good news for Romania because it will compete with the other two and will be able to progress. If the plant in Romania is better, it will get to keep its jobs, said Jerome Olive, general manager of Automobile Dacia. If a new crisis occurs, the plant that makes the cheapest cars will get the most orders, which is why the plant in Romania needs to stay competitive, he added.
Dacia has 13,500 employees in Romania, where the average net wage is EUR350, while in Morocco, where 6,000 people are due to work in Tangiers, it is EUR250. Lower wages in other countries have also made Nokia close its plant in Jucu, NV Romania, and relocate production to Vietnam, where it can manufacture cheaper.
Renault group intends to make not only the new Lodgy model and its utility version in Tangiers, Morocco but also Sandero, Logan and Duster models, which will be exported to Western Europe, Dacia’s main market and to Africa.
“On long term I estimate both the plant in Pitesti and the plant in Tangiers will work at peak capacity, each of which with models for different markets,” said Jean-Christophe Kugler, 50, Renault’s senior vice-president of the Euromed region and Dacia chairman. The official added that the plant in Morocco had not been built for the European market only but also for the African market where the company wants to achieve a dominant position.
The start of the manufacturing of the new Lodgy car is good news for the component makers, too, as more parts will be exported from Romania to Tangiers.
The decision to build the plant in Morocco was made after the plant in Mioveni reached capacity, that is 65 cars an hour, or 350,000 a year. However, in 2005 or 2006 the French group had shown interest in buying the plant in Craiova, but changed its mind and went to Morocco instead. The plant in Tangiers begins production in 2012.
As cost increases led Renault to make low cost cars in Romania and continue to design new models in its technology center in Paris, it is now doing the same in Romania, where it wants to focus on product development rather than on actual manufacturing.
“In Romania (…) we now know how to design and make cars, gearboxes and engines, which is not easy. Morocco has something to prove in terms of costs and quality,” said Jerome Olive.
Moreover, the plant in Mioveni is 110 kilometers away from the engineering center, with the testing center in between the two, which is not the case in Morocco.
On the other hand, the plant in Tangiers, unlike the plant in Mioveni, is directly connected to the harbor via a highway, so that cars can be exported by sea to Western Europe, Dacia’s main market. Romania, however, does not have highways to make it easier to export cars. The new plant in Tangiers has a higher automation level, which means lower staff numbers (6,000), while in Mioveni, the cars are assembled by the 13,500 employees.
Jacques Chauvet, the predecessor of Jean Christophe Kugler said this March that since the Romanian market is Dacia’s third most important and 90% of the output of Mioveni goes west, the company decided to look for a place close to that market.
Renault has invested over EUR1.7 billion in Romania so far, which translates into an annual pace of EUR140 to EUR150 million, Jerome Olive said.
(English version by Loredana Fratila-Cristescu)