* Government lawmakers criticize Renault move
* Low-cost minivan to have entry price below 10,000 euros
(Adds politician comments, details)
By Gilles Guillaume
TANGIERS, Morocco, Feb 9 French car maker
Renault opened a sprawling low-cost Moroccan factory
on Thursday, taking aim at strong European demand for no-frills
vehicles in a bid to buck the overall decline in the region's
With the inauguration of its 3 million square metre (32
million square foot) facility near Tangiers, the partly
state-owned automaker risks inflaming a French political debate
on domestic jobs, weeks before a presidential election.
"The question of building this factory in Western Europe
didn't even arise," Renault Chief Executive Carlos Ghosn said in
a radio interview ahead of the opening ceremony.
"That would have been incompatible with the concept" of
low-cost vehicles, he added.
The plant is about to start production of a spartan minivan,
the Lodgy, to be sold at less than half the price of mid-market
rivals such as Volkswagen's Touran people-mover, or
Renault's own French-built Scenic.
A small delivery van, to be launched from Morocco later this
year, will also be pitched well below the equivalent Renault
Kangoo model assembled in northern France.
"A factory like this can only be a good thing for Renault's
production costs," Paris-based Societe Generale analyst Philippe
Barrier said. "It's an unbeatable manufacturing base for the
For an initial investment of 600 million euros ($795
million), sweetened by tax breaks, the Moroccan plant will reach
an annual production capacity of 400,000 vehicles next year.
Workers' salaries amount to less than a quarter the French
French President Nicolas Sarkozy, trailing Socialist rival
Francois Hollande's ratings ahead of the first election round on
April 22, has leaned heavily on industrial companies to keep
jobs in the country.
During the last crisis, the government lent 6 billion euros
to Renault and PSA Peugeot Citroen on condition that
they avoid domestic closures. The French state is Renault's
biggest shareholder with a 15 percent stake.
The factory opening drew immediate criticism from
politicians in France, where unemployment is at a 12-year high.
"It's completely intolerable and even scandalous," said
Christian Estrosi, a lawmaker and former industry minister for
Sarkozy's governing UMP party. "Carlos Ghosn is breaking the
promises he made to his main shareholder."
Senator Gerard Larcher, a former majority leader, said
Renault was ducking its "societal responsibility" to French
workers and suppliers.
Priced below 10,000 euros for its most basic version, the
Lodgy builds on the surprise domestic success of Renault's
low-cost Dacia brand, assembled in Romania.
The original 2004 Logan sedan proved more successful in
Europe than in many of the markets for which it was designed,
such as India. Dacia's Duster SUV has since become a runaway hit
"We see this factory as a dangerous development," said
Fabien Gache, a spokesman for the CGT, Renault's dominant French
"These vehicles are basically 'Loganised' Scenics and
Kangoos," Gache said. "They're bound to hit the Renault brand's
Renault's low-cost entry vehicles, sold as Dacias in Europe
and Renaults elsewhere, increased their share of group
deliveries to one third last year from about a quarter in 2010 -
even after the withdrawal of government crisis incentives that
favoured cheaper cars.
Western European sales of Renault models dropped 8.5 percent
in 2011, outpacing the region's overall 1.3 percent decline in
car registrations, while Dacia increased its market share.
The 10,000 euro entry price for the Lodgy, available in
five- or seven-seater versions, compares with list prices
starting at around 21,000 euros for a Scenic or Touran in
France, excluding special offers.
($1 = 0.7545 euros)
(Writing by Laurence Frost; Editing by Helen Massy-Beresford
and David Cowell)