Renault Twingo Production to Begin in Slovenia, Protecting Jobs
Renault has signed a memorandum of understanding with the Slovenian government to produce 150,000 new Twingos per year at the Revoz plant in Novo Mesto, Slovenia, starting in 2026. The decision to build the Twingo in Slovenia is seen as a move to sustain the plant’s existing outputs and protect 1400 jobs, following the discontinuation of the previous Twingo model after 10 years on sale. The new Twingo is expected to have one of the shortest lead times between concept and production of any Renault model, with just a two-year gap between its unveiling in November 2023 and its final car due to be shown in late 2025.
Partnership with Chinese Manufacturer to Accelerate Development
To meet the tight production schedule for the new Twingo, Renault recently formed a partnership with an unnamed Chinese manufacturer. While it is believed that the Chinese company is a supplier rather than a car maker, Renault Group chief Luca de Meo has emphasized the importance of this partnership in achieving the ambitious timeline and finding cost efficiencies.
Possible Influence of EU Tariffs on Chinese-built Cars
The decision to build the Twingo in Slovenia instead of China, where labor costs are significantly lower, may have been influenced by the European Union’s recent introduction of tariffs on Chinese-built cars. These tariffs, which are expected to be finalized by November after negotiations with the Chinese government, have already affected other car manufacturers. For example, SAIC, which owns MG, has to pay an additional 37.6% on the wholesale price of EVs built in China, while BYD is being charged 17.4% and Geely 19.9%. The tariffs also impact eGT New Energy Automotive, which builds the Renault Group’s Dacia Spring and is subject to a tariff of 20.8%.
Insights and Analysis
The decision to produce the new Twingo in Slovenia is a strategic move by Renault to protect jobs and ensure the sustainability of the Revoz plant. By building the Twingo alongside the Clio, Renault can leverage existing infrastructure and resources, minimizing costs and maximizing efficiency. The short lead time from concept to production is remarkable and reflects Renault’s commitment to meeting consumer demand in a timely manner.
The partnership with a Chinese manufacturer further highlights Renault’s determination to accelerate development and capitalize on cost efficiencies. Collaborating with a Chinese supplier allows Renault to tap into the country’s vast manufacturing capabilities while navigating potential trade barriers. It also demonstrates the global nature of the automotive industry and the importance of international partnerships in achieving success.
The potential influence of EU tariffs on Chinese-built cars adds another layer of complexity to the decision-making process. By producing the Twingo in Slovenia instead of China, Renault may be avoiding potential trade barriers and ensuring a more favorable market position within the European Union. This decision underscores the impact of geopolitical factors on production strategies and highlights the need for car manufacturers to adapt to changing trade dynamics.
In conclusion, the production of the new Renault Twingo in Slovenia is a strategic move that protects jobs and ensures the sustainability of the Revoz plant. The short lead time and partnership with a Chinese manufacturer demonstrate Renault’s commitment to meeting consumer demand efficiently. The avoidance of potential EU tariffs on Chinese-built cars further reinforces the complexity of global trade dynamics in the automotive industry. Overall, this decision highlights Renault’s adaptability and strategic thinking in navigating a rapidly changing market.