Renault has started production at its Melhoussa assembly plant in Morocco and will begin shipments of two models through the adjacent Tanger Med port, which has a 20-hectare car carrier terminal capable of handling 1m vehicles a year. The company has confirmed logistics contracts with French logistics providers including SNCF divisions STVA and Geodis, as well as with Gefco.
The two models being produced this year, both derived from the Logan platform, are the Dacia Lodgy, an MPV (pictured), and a small commercial vehicle to be introduced later on this year.
The plant will officially open on Thursday this week but is already producing cars on its first line. It will have an initial capacity to produce 170,000 vehicles a year. A spokesperson for Renault told Automotive Logistics that 2012 is not a full production year and currently the plant is in its ramp up stage to meet a production objective of 30 vehicles per hour.
A second line will come into operation in 2013 with the same capacity by which time capacity will reach 400,000 units per year.
Renault has invested €600m ($800m) in the plant, with €350m dedicated to the first line. The company expects this figure to rise by between €200m and €400m when the second line is in operation, subject to the diversity of the models produced.
Melhoussa will be the only production plant for these new models, meaning that up to 95% of output for the plant will be for export, mostly in Europe, but also to Turkey, Africa and South America. Renault said that it is still to early to reveal a more specific list of export markets.
A slowdown in the European market may well push Renault to explore other global markets more aggressively.
The plant nevertheless offers Renault an impressive link to the wider European market for both inbound material imports and vehicle exports.
As well as the vehicle terminal capacity, the port complex boasts two container terminals each with a capacity of 1.3m TEUs, which removes the usual inbound restrictions to starting volume production in a region where the supply base may be underdeveloped.
Another factor in the decision to manufacture in Morocco has been the free trade agreement between the country and the EU, which has eliminated most customs duties for industrial goods exported to the common market.
Ro-ro shuttle services to the Spanish port of Algeciras, just 14km across the Gibraltar Straits, will also provide fast access to the European market.
In terms of inbound supply, a Renault spokesperson said that engines, gearboxes and other specific chassis parts come from Renault production sites across Europe, including Spain, Romania, France and Portugal.
Renault has confirmed that it will be working with logistics provider Geodis Wilson, French rail provider SNCF’s transport and logistics arm, for inbound logistics. Geodis opened a 7,200-square-metre warehouse and consolidation centre that it is currently expanding to 20,000-square metres.
SNCF’s vehicle logistics division STVA is involved in the outbound logistics from the plant to the port for export. The carmaker has also confirmed it is working with Gefco for local outbound services in Europe.
STVA entered into a joint venture with freight manager Geodis Wilson for the provision of finished vehicle rail wagons and compound management. It is also leasing and managing a compound at the port for temporary storage of the vehicles prior to ocean shipment. The storage facility is designed to protect the vehicles from sand and hail damage.
Michel Faivre-Duboz, who was appointed general manager of Renault in Morocco in September 2010, is heading operations at the new plant as part of his wider responsibilities for operations in Morocco, which includes Renault’s existing manufacturing plant in Casablanca.
Whilst the logistical benefits of the factory are significant, the plant’s primary markets may present challenges. The European market, which is forecast to decline in 2012, is smaller than when the Melhoussa project was announced in 2007 and may slow the growth of output.
With Europe arguably already facing overcapacity in some markets, there may be questions as to whether the new plant won’t eventually impact production elsewhere for Renault in Western Europe. Originally the plant was also a Renault Nissan Alliance project but Nissan froze participation during the recession and Renault has moved ahead alone.
While future production shifts cannot be ruled out, Renault has nevertheless committed to investing in its European plants, particularly in its home market of France, where the French government has a 15% stake.
Even with a slowdown in Europe, the plant’s location in the Tanger Med port complex could be significant if the carmaker can grow its links to world markets, particularly in South America, the Middle East and Africa.
