Car unions fear Morocco move

FRENCH car-workers' unions have reacted with fear to the news that Renault is opening a factory in Morocco that will be capable of producing 400,000 cars a year from next year.

In the middle of a political debate on the need for people to buy Made in France goods the car giant's new Tangiers plant has sparked union fears that the Dacia-branded vehicles will be direct - and cheaper - competition for French-made vehicles.

Renault, where the French state has a 15% stake, has invested one billion euros in the new 300-hectare plant at Meloussa, which is bigger than its largest plant in France, the Pierre Lefaucheux factory at Flins in Yvelines which built 125,000 Clios in 2009.

Wages at Meloussa are expected to be up to four time less than in France and it will produce three low-cost vehicles - including a small people carrier and a van.

The Lodgy people carrier is expected to be a reduced specification model marketed in northern Africa and the Mediterranean countries - but other Dacia models such as the Logan, Sandero and 4x4 Duster have seen strong sales in a Europe desperate for cheaper models.

If sold in France it could be up against the higher specification Scenic which is produced in Douai and the €10,000-€12,000 price point would be half the cost of a Scenic. A van would also be competition for the Kangoo, produced in Maubeuge.

However, Renault says the Dacia brand does not cut Renault sales, being bought mainly by people in the secondhand car market.

Fabien Gache, a leading official for the CGT union at Renault, told Le Monde: "This is a very dangerous factory for us. The two vehicles - which are just the Scenic and Kangoo 'Logan-ised' will concertina the Renault market in Europe if they are imported in large numbers."

Renault, whose alliance with Nissan makes it the world's fourth-largest vehicle producer, made one million cars in France in 2004 but last year built 444,862.