Renault SA has revealed how much work needs to be done to make the French carmaker, which is struggling to improve French productivity, a carmaker trying to become one of the largest centers for electric vehicles in Europe.
The manufacturer announced on Wednesday that ElectriCity, a wholly-owned unit that combines operations at three sites in Douai, Maubeuge and Ruitz, will aim to produce 400,000 vehicles annually. Renault is committed to making its research and development efforts and training center a separate legal entity.
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ElectriCity will be “the largest and most competitive center for the production of electric vehicles in Europe,” Renault said in a statement. Unions said on Tuesday that they had signed with the project, although some had warned that they would be careful in future contract negotiations.
(Also read: Renault Megane teases new E-Tech electric vehicle)
In defining Renault’s plans, Lucri Biondo, head of ElectriCity, said the plants are operating below capacity and are far above where manufacturing costs should be.
The EV hub is a key part of CEO Luca de Meo’s turn to turn Renault around and boost production of electric and hybrid vehicles. The French state, a strong shareholder of Renault today, is putting pressure on it to save jobs and keep EV technology in the country, as well as from investors who want to improve the company’s profitability.
“There’s work to be done,” Biondo said in a call about the center with reporters, and promised that the company will add 700 new jobs by 2025 in addition to the plant’s existing 5,000 employees. France has cut 4,600 net jobs as part of a comprehensive cost-cutting plan.
According to Biondo, both Douai and Maubeuge factory use rates are too low. The former makes approximately 25,000 vehicles a year, compared to 300,000 capacity. The latter site produced about 100,000 available vehicles last year and can make up to 250,000.
Renault’s manufacturing costs at the plants are also “very far” from an optimal level of between 3% and 4% of the vehicle’s price, Biondo said. He asked for a reduction in the time spent doing each Kangoo van in Maubeuge by three hours.
The company has already invested about 1 trillion euros ($ 1.2 trillion) in plant refurbishment work, and more will be needed to get assembly lines ready for new EV models, they said. Renault will explain its battery manufacturing plans near the site this month.
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