Renault Gears Up for Africa Expansion

Renault SA tells Bloomberg News it has signed a memorandum of understanding with the government of Algeria to erect a new assembly plant there.

Jean-Christophe Kugler, Renault's senior vice president for Africa, did not give the news service such details as the facility's specific location, launch date, capacity or models to be produced there. The Algerian factory would be the company's third assembly plant in Africa. The first is a 50-year-old facility in Casablanca, Morocco.

Renault and alliance partner Nissan Motor Co., are currently ramping up the first phase of a €1 billion minivan factory in Tangier, Morocco, that will eventually have capacity to make 400,000 vehicles per year. The initial line has annual capacity of 170,000 vehicles.

Bloomberg says the Tangier factory will be Africa's largest assembly plant by far. BMW and Daimler each can produce 50,000 cars per year in South Africa. Volkswagen's capacity in that country is twice that size.

Renault wants to jump into the region's emerging markets ahead of rivals, according to Kugler. He tells Bloomberg that sales in Africa, which currently total about 1 million vehicles annually, have the potential by next decade to mirror the growth pattern of South America. Volume in the latter region is expected to reach nearly 5.8 million units this year.