Renault Expands Manufacturing in Morocco

Renault is significantly reconfiguring its strategic priorities, opting to transfer the production of its new car models from Romania to Morocco. The decision hinges on Morocco's exceptional competitive advantages, including low production costs and attractive tax incentives within its free zones.

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The Group faces one of the biggest challenges in its history at the country level, resulting from both external and internal factors. The significant increase in electricity (and gas) prices in Romania has severely affected and continues to affect the competitiveness of Renault's operations in the country, including the Mioveni plant, which must regain its competitiveness so that we can allocate the production of other models from here in the future.

Morocco's business climate is described as providing sustainable flexibility and the capacity to efficiently lead the transition towards modern and electric production lines. This strategic shift is putting pressure on Renault's Dacia factory in Mioveni, southern Romania, one of the country's largest automotive manufacturing sites.

The move has sparked warnings in Romania about the potential loss of the country's attractiveness in the automotive sector. Specialized sources indicate that Renault's decision stems from an economic equation where Romania has lost out on key strategic fronts. Factors contributing to this include rising electricity and gas prices in Romania, increased production costs for the French automaker, and higher labor wages compared to Morocco.

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Except for the Duster model and the Bigster model, there are no new projects planned for implementation within the factory in the foreseeable future.

Furthermore, Romania's government policies, including tax increases to address budget deficits, are cited as reasons for Dacia freezing future expansion plans at the Mioveni plant and laying off workers. This has led to social unrest and accusations exchanged between labor unions and the government. Renault executives have acknowledged facing significant challenges in Romania due to both external and internal factors, particularly the high energy costs impacting competitiveness.

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Things are not yet clear regarding Renault Group's future investments in this country, especially since policies in taxation and energy costs are evolving in a direction that does not serve the Group's interests.