Renault May Boost Romanian Investment

FRANKFURT – Renault SA plans to make a decision about possible new investment in Romania by the end of October, a top Automobile Dacia SA executive says at the auto show here.

Demand for the Romanian-built Dacia Logan is better than expected, and Dacia is facing a shortage of the entry-level cars.

"At the beginning of September, we had to reduce production of the Dacia Pickup truck in order to make more Logans," says Jean-Michel Sicre, Dacia executive vice president-sales and marketing.

Currently, Dacia manufactures 750 vehicles, including 680 Logan and 70 Pickups, per day on three shifts.

"We are working all Saturdays and some Sundays," Sicre adds. He says the plant will build about 180,000 vehicles this year. In addition, it also produces assembly kits for Logan plants in Russia, Morocco and Colombia. For 2006, Dacia plans to increase capacity slightly so that it can manufacture about 230,000 complete cars.

Logan gets diesel.

"Then we have to make investments (if the plant is to increase production further)," says Sicre. "This will now be decided by (Renault CEO) Carlos Ghosn – let's hope favorably, so that we can invest in order to increase the production to more than 300,000 units a year.” Plans call for annual production of up to 350,000 cars annually in Romania. Sources there say two possibilities exist for increasing production in Romania: adding capacity at the current Dacia site in Mioveni or buying the Daewoo Automobile Romania car plant in Craiova.

Sicre declines to comment on the Craiova option. Should Renault decide against additional investment in Romania, it could increase Logan output at other assembly plants. For example, Spain could source its Logans from the SOMACA plant in Morocco rather than from Romania.

Meanwhile, Dacia debuts the first diesel engine for the Logan. The 1.5L cCI common-rail turbodiesel produces 65 hp and meets Euro 3 emissions standards (a Euro 4-compliant version will be launched in February). It joins the 1.4L and 1.6L gasoline engines in the Logan lineup.

In the spring, Dacia will unveil a 1.6L 16-valve gasoline engine.

In addition to the current sedan body, 5- and 7-passenger station wagon models will be launched in October 2006. The auto maker also plans to add a light commercial vehicle version in early 2007.