Renault Expanding to Africa to Diversify Out of Europe

RenaultRenaultFrance, 1898 > present189 models
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plans to build Africa's largest automotive factory to diversify it from volatile European market. The factory will be operated by NissanNissanJapan, 1932 > present159 models
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and Renault and cost roughly €1 billion to build in Tangier, Morocco.

The new factory will be able to build 400,000 cars a year. The factory began construction in February and will build the DaciaDaciaRomania, 1966 > present11 models
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Lodgy and DokkerDacia DokkerRomania, 2012 > present9 versions
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to begin. The factory is being built in two stages. The first stage will be finished this year and have a 170,000-car capacity. The second stage will open next year and bring it to full capacity. Renault claims that Kenya and Nigeria of having rapidly growing car markets that it could take advantage of. 

BMWBMWGermany, 1918 > present87 models
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, VolkswagenVolkswagenGermany, 1938 > present98 models
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and DaimlerDaimlerGermany, 1889 > present12 models
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already have factories in South Africa, but they produce about half of the number of cars combined that Nissan will from its new factory. 

"Africa is stabilizing. It's better to take positions right now to have new growth drivers when other markets start to mature," said Jean-Christophe Kugler, Renault's senior vice president for Africa. 

While Europe is becoming more competitive, Africa is still basically wide open. Nissan and Renault see the chance to build loyalty in the market and introduce low cost models. Most of the cars will be Renault-badged Dacias. 

The rate of car ownership in Africa is incredibly low. There is just 1 car in 1000 people in Africa, and more than half of the continent's auto sales come from South Africa. However, Renault sees an advantage in being among the first automakers to offer low cost, quality new cars in the rest of Africa. 

Renault now sells 47% of its cars outside of Europe, and it is trying to increase that figure as much as possible. Its French rival PSA- PeugeotPeugeotFrance, 1882 > present120 models
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CitroënCitroënFrance, 1919 > present94 models
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sells 39% of its cars outside of Europe. 

The Renault-Nissan Alliance also signed a memorandum of understanding with Algeria to build a factory there as well.

Source: Automotive News Europe