Stellantis: during the transition, relocations continue!

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The announcement in the week of 14 November of a doubling of the production capacity of the Stellantis factory in Kenitra was presented, like the announcement of the construction project of the factory 7 years ago, as intended to satisfy the African and Middle Eastern needs. However, it is a reaffirmation by the group of a clear strategic course: the competition of sites, employees and states.

Continuing the discourse which has been his since the construction project of the Kenitra factory was born, the management of Stellantis presented last week its project of doubling the assembly capacity of the factory as being intended to allow the company to hold a leading position in the expansion of the African and Middle Eastern markets.

The Moroccan partners are trying not to interfere too much with this communication strategy but are more explicit about the real ambition of the project by putting forward the main economic virtue that this investment will have, beyond the jobs created directly and indirectly: exports. Thus, the Minister for Industry and Foreign Trade, Ryad Mezzour, was pleased in May with the growing automobile surplus recorded. He stated: 'In terms of volume, Morocco is the leading exporter of cars to the European Union ahead of China, Korea, Japan, Turkey... The best-selling car in Europe is made in Morocco.

It was not the Sandero but the Peugeot 208 and, when it is mentioned, the authorities do not indicate at any time that the "ecosystem" that they are trying to structure with large subsidies allows the local market to be supplied. They are explicit and the importance that the ports have in their project indicates it: the Moroccan assembly sites are - for the moment and for a long time undoubtedly - sites that are, for the vast majority of the volumes that they generate, export sites towards the EU.

It should be remembered that between its Casablanca and Tangiers factories - of which the Moroccan site laquotidienne.ma tells us that "almost all production is exported to 70 foreign destinations, notably Renault Expresses, Dacia Lodgy and Sandero" - Renault has an assembly capacity in Morocco of around 400,000 cars.

If we add the current capacities of Kenitra and those to come, 800,000 vehicles would eventually leave the Moroccan assembly lines. Over the last few years, the Moroccan PC market has not exceeded 155,000 registrations and the OICA places the African market below 900,000 vehicles.

Even if we add 300,000 LCVs, we do not reach 1.3 million. According to the Renault website, including the Middle East, the current market is estimated at 2.2 million, but Morocco is not the only producer and a large part of the needs of these regions is met by imports.

The presentation in 2015 of the Kenitra project as intended for the region, like that of the doubling of capacity in 2022, needs the great complacency of the press to create an illusion.

Thus, the said press picks up the Stellantis press release which claims that, according to Carlos Tavares, the group is counting on "Africa and the Middle East as a growth market (...) and a third engine for Stellantis, alongside North America and Europe" and says that it has ambitions to become "a market leader and to achieve a double-digit margin". The article nevertheless stresses that: "The location of Kenitra on the Atlantic coast but 200 kilometres from the Strait of Gibraltar gives it a central position for exporting to sub-Saharan Africa, the Middle East and southern Europe" (emphasis added). Some articles go so far as to present this expansion into Africa and the Middle East as allowing Stellantis to "dispense with China".

The reality is rather that, like the Tangiers and Casablanca sites for Renault, the Kenitra site is clearly part of the European industrial organisation of Stellantis. For the moment, Stellantis does not have a brand equivalent to Dacia but the former Renault-Nissan, including C. Tavares, are convinced that in the emerging countries as in Europe, for thermal vehicles and then for electric vehicles, it is necessary to develop projects which are 'natively' intended to allow the catalogue of offers which are below what will be proposed in the continuity of the e-208, e-2008, Corsa and electric Mokka.

Insofar as the A segment was - rightly or wrongly - perceived as sufficiently impractical that the 108 and C1 offers, PSA's cousins of Toyota's Aygo which has a little sister, were not renewed, Stellantis needed in design as well as production to structure an entry offer. Great ambitions were born on this side and seem to have been reduced but what remains is now more precise.

Obviously, it is around Citroën - whose boss, Vincent Cobée, was in charge at Nissan of the Datsun brand which was intended to do this job - that this strategic axis was structured. Today, by exploiting the work which has been partly sub-contracted to Tata Consulting Engineers, an engineering company belonging to the Tata holding, an Indian and Brazilian C3 has been born.

According to L'Argus in February, this "CMP entry" will be adapted for the European market. At the beginning of the year, Stellantis is said to have awarded this programme to Trnava, which will also be responsible for producing the future European Citroën C3 (CC21) in 2023, as well as the replacements for the Citroën C3 Aircross (CC24) and Opel Crossland (OV24) in 2024. Fiat would also borrow this low-cost platform for the future Multipla SUV in 2024 and Panda in 2025.

With the transfer to Zaragoza of the electric version of the current restyled 208 and the allocation to the same site in 2026 of the future electric Corsa and 208 on the basis of the new STLA platform, a rather vast game of musical chairs seems to be organised and producing 400,000 vehicles at Kenitra is part of this context, much more so than in the context of a rapid rise in the production of Stellantis for the African and Middle Eastern markets.

At Stellantis, Zaragoza will play the role of pioneer in the all-electric B segment that Douai will play at Renault. For the CMP entry, which will only be electrified a little later, Trnava will be the pilot, but Kenitra will play an increasing role. Trnava, which already has experience and which will take advantage of its relative proximity to the battery production site of the Chinese Svolt (a subsidiary of Great Wall) in Germany to take charge of the first assemblies of the electric cars resulting from the Smartcar programme, but Kenitra will be almost equal.

Just as the Romanian employees were once put in competition with those of Tangiers, those of Trnava now have reasons to moderate their demands: the French employees are no longer the only ones to have reasons to be moved by the announcements of investment in Kenitra.

As for Bruno Le Maire, who a few weeks ago was still talking about the possibility of seeing an e-208 assembled in France, he must understand that, unlike those concerning trade, the industrial plans of C. Tavares and his teams for the electric B do not pass through France.

22/11/2022

The weekly column by Bernard Jullien is also on www.autoactu.com.

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