Renault shifts new Dacia production from Romania to Morocco as costs reshape strategy

Morocco’s competitive business environment is increasingly attracting global automakers, with a combination of lower production costs and tax incentives prompting French automotive group Renault to shift production of some new Dacia models from Romania to Morocco, according to industry reports.

The move reflects Renault’s broader strategy to optimize manufacturing by relying more heavily on countries offering lower operating costs and greater flexibility as the industry transitions toward modern and electric vehicle production.

Romania’s Mioveni plant, one of Dacia’s largest production facilities and a major exporter of vehicles, is facing mounting uncertainty after Renault decided to manufacture several new models, including the Dacia Bigster, in Morocco and other countries instead. The decision has sparked concerns in Romania over the country’s declining competitiveness in the automotive sector.

Industry sources attribute Renault’s decision to several economic factors. Rising electricity and natural gas prices in Romania have significantly increased manufacturing costs, while labor expenses have also climbed relative to Morocco, where wages remain lower and companies operating in free zones, including those around Tangier Med Port, benefit from extensive tax incentives.

The sources added that Romania has also become less attractive after the government increased corporate taxes to address its budget deficit. In response, Dacia has frozen plans to expand the Mioveni factory and reduced its workforce, fueling tensions between labor unions and the government.

During a recent visit to Romania, Renault CEO François Provost acknowledged the challenges facing the group’s operations in the country.

“The group is facing one of the biggest challenges in its history in Romania due to both internal and external factors,” Provost said, noting that high electricity and gas prices continue to undermine the competitiveness of Renault’s Romanian operations, including the Mioveni plant.

He added that the factory would need to regain its competitiveness before Renault could consider assigning production of additional vehicle models there.

Romania has also seen a sharp decline in Dacia sales in recent years. For the first time, the Mioveni plant produced fewer vehicles than Renault’s Moroccan facilities, while no new production lines are currently planned.

Mihai Bordeanu, head of Dacia Romania, said the company has no plans to introduce new projects at the Mioveni factory beyond production of the Duster and Bigster models.

Other Dacia models are currently manufactured at Renault plants in Morocco, as well as facilities in Bursa, Turkey, and Novo Mesto, Slovenia.

Speaking at a press conference last year, Bordeanu said Renault’s future investment plans in Romania remain uncertain, citing tax policies and rising energy costs that “are evolving in a direction that does not serve the group’s interests.”

The developments come amid broader concerns over the competitiveness of Europe’s automotive industry.

In May, the European Automobile Manufacturers’ Association (ACEA) warned the European Commission that the commercial vehicle sector is losing competitiveness and risks losing production capacity, innovation and industrial jobs without coordinated policy action.

ACEA said increasing competition from regions with lower production costs, different regulatory frameworks and more coordinated industrial strategies is placing unprecedented pressure on European manufacturers, suppliers and workers.

The association called for a comprehensive European industrial strategy for road transport aimed at strengthening economic competitiveness, technological leadership and long-term industrial resilience.