By on February 10, 2012

Renault’s establishment of a factory in France’s former colony of Morocco has drawn ire from union officials and industry in the sort of election year politicking that wouldn’t be unknown to Americans. The language and culture may be different, but the theme remains the same; good jobs in the manufacturing sector are leaving the country, and they aren’t coming back.

Renault’s Dacia brand is having a good run in world markets, and achieved a bit of notoriety when Top Gear’s James May professed his undying love for the Dacia Sandero compact hatchback. Renault has even gone as far as killing off half of their UK lineup, replacing the missing vehicles with Dacia cars instead.

A factory in Tangiers, Morocco was established to help build the new 7-seater Dacia Lodgy minivan, which will cost half as much as its Renault equivalent, the Scenic. The plant will also build a replacement for the Logan, and will be able to produce as much as 400,000 cars annually. Renault CEO Carlos Ghosn denied that the Lodgy would cannibalize sales of the Scenic, but the plant’s announcement seems to have struck a nerve in France.

Dacia’s are currently built in Romania, an EU member state, where workers earn 450 euro per month. While a French worker in a Renault factory earns about 1,800 euro, employees at the Moroccan plant will only take home ,250 per month. One columnist in French paper Le Dauphiné Libéré noted that Moroccan workers won’t even be able to buy the cars they produce with that wage. But the Tangiers plant is right near a major port, and Morocco, a relatively poor country will benefit from the 6,000 jobs added by the plant alone.

Meanwhile, Europe is in the throes of an economic crisis with the potential to destabilize the entire continent – and France, along with Germany, are doing the most to bring the EU out of its tailspin. France is in an election year, with Socialist leader Francois Hollande making headway against current leader Nicolas Sarkozy. Not surprisingly, union leaders are giving the government (a 15 percent stakeholder in Renault) some merde royale. “We see this factory as a dangerous development,” said Fabien Gache, head of French labor union CGT. “These vehicles are basically…[Dacia branded] Scenics and Kangoos,” Gache said. “They’re bound to hit the Renault brand’s market share.” Even a former cabinet minister for Sarkozy has accused Renault of “social dumping in Morocco“.

Renault is estimated to produce 30 percent of its vehicles in its home market of France. Working in a Renault factory and taking advantage of the French welfare state’s generous benefits used to be a ticket to a solid middle class life in France, but the rise of “l’hexagone” (Dacia) in favor of “le diamant” (Renault) represents a symbolic threat to a former way of life that came to be seen as a birthright in not just France but much of Europe. Ghosn went as far as to say that he never even dreamed of building a Dacia factory in Western Europe, as it would be incompatible with the idea of a “low-cost” vehicle. The Dacia Duster is a major success in France, but it could never be built with workers earning 1,800 euro a month and taking 5 weeks paid vacation. Dacia’s market share has risen as Renault’s has fallen – and why wouldn’t it when the economy is in a toilet, and one can buy a Renault-engineered vehicle for half price compared to the “brand name” version?


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14 Comments on ““Fabrique Au Maroc” Renault/Dacia Cars Draws Controversy In France...”

  • avatar

    Assembly costs are a relative small part of the cost of a car. Add the higher transportation costs of moving the car from Romania and it is a wash. Main reason why Renault is building the factory in Morocco is to be on the ground when the car market in the magreb explodes.

  • avatar

    “Renault’s establishment of a factory in its former colony of Morocco”
    Renault is a company. It doesn’t have colonies. Did you mean France’s colony?
    “and achieved a bit notoriety”
    Where’s the “of?”
    “and Morocco, a relatively poor company”
    You mean a “country?”

    Look, I don’t want to be that guy, but I feel like the quality of the copy editing is really slipping. Yesterday there was that disastrous “John Hunstman” headline, and now we have this. I see more and more careless mistakes creeping into TTAC articles. It will ultimately hurt TTAC’s credibility if things continue to go this way.

  • avatar

    …but who in Europe would want to purchase a car made in Morocco?

    • 0 avatar

      Why not? Cars from Morocco might be as good or bad as cars from Turkey, Hungary or Romania.

      • 0 avatar

        Well, I am not sure how much tradition Morocco has in car building, or how much experience they have with building cars, but Renault and the Romanian Government opened the Dacia factory sometimes back in 1969 when they were building rebaged Renault 12s as Dacia 1300 and Renault Daulphine as Dacia 1100. Actually the first few thousands of the Dacias had Renault engine and tranny and some of those were the best Dacias ever made ( they are still on the road today). Sometimes back in the mid 90s, Renault came back to Romania and took over/bought the Dacia factory for not much money, re-tooled it and started to build cars again.

    • 0 avatar

      Darcia sells its cars as cheap cars. You need a reason why your cheap and paying your workers peanuts is a good excuse because the real reason is that the cars aren’t that good seen from a technological standpoint.

      Also Moroccans have the name that the are less criminal etc. than Romanians so if you can sell Romanian cars than selling Moroccan cars should be easy

  • avatar

    This is an amusing story because the French should be the least surprised by this development. North Africa’s proximity to Europe and usage of a widely spoken European tongue make them a logical location for low-cost production of goods for export to Europe.

    They also benefit from the possession of fossil fuel resources and tiny debt-to-GDP ratios. Obviously, infrastructure is a problem, but foreign investors and some countries’ leaders are working to improve it.

  • avatar

    Not surprising, really; France has an absurdly high payroll tax and very restrictive labor laws, even by European standards.

    Still, 1,800/month is much less than I thought a French factory worker would make.

  • avatar

    consumer is king

    if they want cheap cars made in morocco, china, india, mexico etc. they will buy buy them

    have a philosophical issue with it? don’t buy it

  • avatar

    yes, it’s a good step for the moroccan whos search the job in voiture d’occasion au maroc.

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