Big Story 10

Renault to shift more Clio production to Turkey: sources

PARIS (Reuters) - French carmaker Renault plans to move more production of its Clio mini to Turkey, company and industry sources told Reuters, in what is likely to be the start of phasing out domestic manufacturing of the brand’s biggest seller.

The logo of Renault is seen during the 87th International Motor Show at Palexpo in Geneva, Switzerland March 8, 2017. REUTERS/Arnd Wiegmann

The plan extends a shift to Renault’s plant in Bursa, south of Istanbul, that has proved politically sensitive in the past.

In 2010, Renault scrapped plans to transfer all Clio production abroad after a showdown with the French government, its biggest shareholder. This time, falling French Clio output will be offset by rising electric car production, blunting its political edge.

The Clio, which has notched up 15 million sales over four generations since its 1990 launch, was Europe's second bestselling car last year after the Volkswagen VOWG_p.DE Golf.

Some 94 percent of the fifth-generation Clios would be built at Bursa and Novo Mesto in Slovenia, one industry source said, with the remaining 6 percent assembled in Flins, west of Paris - and probably only for the first few years of peak sales.

“Bursa will be the main plant for the new Clio, followed by Novo Mesto,” said another source with knowledge of the plan. “Flins will top up production when those two sites can’t meet demand.”

A Renault spokesman said no decision had been made on future Clio production. “The work is still ongoing,” he said. “Any comment on it would be incomplete, erroneous and premature.”

Flins, which accounted for about 15 percent of Clio output last year, also assembles the Zoe electric car and is in line for new electrified vehicle production, making the Clio transfer more palatable for unions and the state.

Renault dropped its decision to shift production eight years ago after Chief Executive Carlos Ghosn was summoned for a dressing-down by Nicolas Sarkozy, then France’s president.

Reduced Clio output at Flins, expected to peak at 25,000 cars and tail off rapidly, may not be enough to justify the tooling investments required for full manufacturing.

Instead, other Renault sites might ship pre-assembled “CKD” modules to a simplified Flins production line, two sources said.

A hybrid version is expected to follow, equipped with Renault’s “Locobox” gasoline-electric transmission.

The next Clio would combine bold interior changes to accommodate connected and autonomous technologies with gentler exterior styling tweaks that build on the current model’s success, the French carmaker’s design chief told Reuters.

“At Renault we used to be in the habit of reinventing everything all the time,” Laurens van den Acker said in a recent interview at the Geneva auto show. “So it’s almost a little revolution to take a more German approach.”

Reporting by Laurence Frost; Editing by Ingrid Melander and Edmund Blair