Renault is planning to build its next Megane model at the Rosslyn, Pretoria plant which currently assembles Nissan and Fiat models, the Business Day newspaper reported on its website today.

Renault currently ships built-up vehicles to South Africa.


Business Day said that ‘sources close to Renault’ had told it that the company was conducting a feasibility study for South African assembly, and was looking at producing [next generation] Megane models for both local sale and export by 2003.


The Clio and Megane-derived Scenic models do not appear to be part of the plan, the newspaper added.


Volkswagen and BMW currently build around 20 percent of their right-hand drive Golf and 3-series export models in South Africa.


Another company taking advantage of favourable trade rules that allow component imports in exchange for built-up vehicle exports is Mercedes-Benz , which builds all of its right hand drive C-class saloons in the country.


However, Renault has not yet commented publicly on its South African plans, Business Day said.







Strategic Review-

Renault





The newspaper said that Trade and Investment SA, a division of the trade and industry department, confirmed on Friday that a delegation visited Renault’s head office in Paris last year to discuss South African assembly.


A source told Business Day that Nissan’s Rosslyn plant could handle the increase in production volume required to assemble the Megane as it was operating only two shifts a day, producing Nissan’s Sentra and Hardbody models, and the Fiat Uno and Palio .


The newspaper added that Renault’s Sub-Saharan Africa vice-president Andre Caussimon said on Friday that the SA market had the potential for growth but would not comment on plans for an assembly plant.


“We have not reached a conclusion on the matter,” he told Business Day.


“The company sold about 10,000 vehicles last year and intends to reach 15,000 by the end of this year.”


Business Day said that Renault has moved its African office from Paris to Johannesburg as part of a strategy to make South Africa one of its key overseas territories.


This suggests that the Rosslyn plant could become a key source of certain right-hand drive Megane variants or perhaps low-volume derivatives such as the station wagon model currently made only in Turkey.


A trade and industry department source told Business Day that Renault was looking at assembling 20,000 units a year which would give the company maximum benefit from the South African government’s motor industry development programme.


But industry analysts told the newspaper that producing Renaults at Rosslyn could have serious repercussions for current agreements between Nissan and Fiat in South Africa.


Though Nissan’s range does not directly challenge Renault’s, the Clio and Megane are competitors for Fiat’s ancient Uno and the ’emerging markets’ Palio range.







To view related research reports, please follow the links below:-


The world’s car manufacturers: A financial and operating review


PriceWaterhouseCoopers Global Supplier Report