Renault to set up $820mn plant in Morocco

French carmaker Renault signed a deal with Morocco on Saturday to build a new factory that would be able to produce up to 200,000 cars a year from 2010, and eventually up to 400,000 a year.

The planned investments in manufacturing capacity were estimated at 600 million euros ($817.5 million), with a first phase of 350 million euros. Further specific investment of 200 to 400 million euros would be made according to the type of vehicles produced.

"Through this project I would like Morocco to become a strategic global base at the highest competitive level worldwide in the Alliance's manufacturing system," Carlos Ghosn, the chief executive of Renault and Nissan said in a statement.

Renault already has a major presence in Morocco, where it produces the low-cost Logan car.

The firm said the new project will create almost 6,000 direct jobs and 30,000 indirect and that it will become one of the main employers in the Tangier region.

"It is the biggest investment by the Renault/Nissan alliance so far," Ghosn told reporters in Tangier.

The plant in Morocco will manufacture cheaper cars for developing markets under the Renault/Dacia brand and small utility vehicles under the Nissan brand, he added.

Some 90% of the plant output will be for export while the remaining 10% is aimed at the Moroccan market.

The plant will be built on an area of 300 hectares at a special economic zone near the Tangier Mediterranean port complex.

Renault and Nissan have already a third of the Moroccan car market.

Ghosn said he expected that market, which has been growing at a double-digit figure in the recent year, to expand further to reach 160,000 to 170,000 cars by 2010.

"This plant will represent one of the biggest industrial achievements of Morocco in recent years and will be one of the highest performing car production centers in the Mediterranean basin," Morocco's Prime Minister Driss Jettou said.