How the Renault Maroc group manages the electronic component crisis how the Renault Maroc group manages the electronic component crisis

In a round table organized Tuesday, November 9 by the Renault Maroc group, Denis Levot, director general of the Dacia and Lada brands, returned to the international electronic component crisis, which affects many sectors, including the automobile.

What must be remembered from its intervention is that the brand has not escaped it, both internationally and Morocco.However, at the local level, the management of this crisis was very effective, allowing the group to minimize the impact on production in Tangier and Casablanca.According to him, the crisis should continue again for the next six months.

In Morocco, an estimated production loss between 50,000 and 70,000 cars

Like all factories around the world, "we have had some production difficulties, because of the shortage of electronic components," said Mr. Levot during this round table.

"During the COVVI-19 crisis, demand for the automotive industry have greatly dropped, as for everything else.The industry is currently resuming, which implies an explosion in the need for international electronic components.»»

In terms of demand, "We have reached levels before the COVIVE crisis in the automobile, but also in other sectors (IT and household appliances, editor's note).The demand for these components has therefore increased clearly, which caused an international shortage. ”

During the third half of the current year, the impact on Renault is clearly visible.In terms of production, "we are at 500,000 cars less than we could produce in the Renault World group, all types of cars combined.A figure of the same order of magnitude compared to our competitors.So it's nothing extraordinary. "

“Regarding our Dacia productions, the loss is estimated between 100,000 and 150,000 cars, between all the sites in the world, including 50% in Morocco, between 50,000 and 70,000 less cars in Somaca (Casablanca) and Tangier.»»

Intelligent and flexible management in Morocco

"Production therefore depends on the supply.We can say that the production chain was quite chaotic ”during the previous months.“Apart from the component crisis, we have also undergone the effects of COVID-19 on Malaysia for example, where many factories have closed.The drop in production is therefore due to a subtle mixture of these two causes.»»

Dacia and Lada’s director general, however, wanted to highlight "the effectiveness of the system put in place in Morocco to manage this crisis.When we saw him coming, we had discussions at the Tangier factory with the union partners, and obtained a very intelligent flexibility agreement. "

"The balance that was found is very impressive.When we knew that we were going to have holes in the production, we opted for a closure of a week, which we put back on the summer leave since we knew at that time, we had morechances of having components.In this way, we played a winner for everyone, namely the group, employees and customers.On the one hand, this strategy allowed employees to maintain their jobs and be either at work or in paid vacation.On the other hand, it allowed the company to make more cars and therefore make fewer losses.For the customer, the situation could have been worse in terms of offers if this had not been done in this way.In Morocco, the management of this crisis was therefore particularly effective.»»

Lack of visibility for the coming months

Regarding forecasts in the coming months and for the first quarter of 2022, all those responsible for the Renault group present during this round table say they lack visibility.

"The market left on very strong bases in the first quarter of this year, with a growth of 7% of sales compared to 2019," said one of them.The figures made in 2020 are not taken into account since it is a year impacted by the health crisis.

"Despite the COVID-19, all the economic indicators were green in early 2021. The component crisis came to deregulate the supply, but not the demand which is still present.»»

"Today, we are on much lower trends and on a market down in October.Indeed, in October 2021, new car sales fell 7% compared to 2020 and 6.4% compared to 2019.

"It is therefore difficult to make forecasts for the coming months.We come back from a period of very strong growth and we head towards another where, unfortunately, offers obliges, we are again on a drop in the market.»»

"The hope that we have, without however making forecasts is that this crisis lasts as long as possible and that all actors in the sector meet demand, which remains high.We also hope not to have big losses in terms of production over the last two months of the current year.For the month of November, we are relatively confident.We have cars to sell to meet the demand, and we hope that this will also be the case for December.»»

In addition, "we still have new announcements of restrictive measures today.It is clear that substantive trends are positive in Morocco.The sooner we will have the availability to support the economic growth that the country is experiencing, the best it will be, ”he concludes.

Towards a change of strategy to deal with this crisis in the future?

Different car production factories worldwide have opted for two main strategies, with the aim of dealing with the international component crisis: the first consists in stopping the production of certain ranges, and the second, in theAbandonment of technology on certain parts, when possible.That will be Renault's for the coming months?

Mr. Levot, who estimates that the sector will still have six months of difficulty of supply, remains optimistic for the future.“In terms of future management, we do not yet know how we are going to proceed, but I believe that the crisis will still continue.These are factories (production of components, editor's note) that restart.Until now, we have had episodes of lack of visibility.We expected certain things, and we finally realized other things.»»

"We have had violent periods, where we experienced between three days and a week of closure in different cities (in Morocco and internationally, editor's note).Today, we see that production is still difficult, but the production net is more regular.The situation therefore does not call drastic changes in terms of ranges, nor in terms of reorganization.»»

"Admittedly, the difficulties are there, but this crisis does not question our local integration plan.We always plan to reach 2.5 billion euros in turnover in local sourcing from 2025. This goes hand in hand with the development of industry and brand, but also with the development of purchases toother territories.»»

The group's marketing director specifies that "everything will depend on the vision we have on the supply.When we know that we will have long -term supply problems, drastic measures are put in place, and when this problem is short -term, we manage differently. "

“For example, during the past months, we decided to postpone the release of Sandero in Morocco by a few months.It was to go out before the summer, but its release was delayed by two or three months.You might think that it is a bad decision, but ultimately, it allowed us to manufacture more Sandero 2, which consumes fewer electronic components than the Sandero 3. It is therefore a bowl of oxygen for the sales teams andindustrial in Morocco, who had more cars than planned.»»

“So we try to manage with the information we have to make the best decisions.Sometimes, certain options have been cut, or even made vehicles without certain parts, which we have retroftated behind before customer delivery.We really looked for the best solutions to serve our customers, compared to a crisis which is by definition volatile and which makes daily management difficult, but I think we got out correctly.Obviously, when we look at the sales levels, we have a decline compared to what we would have liked, but I think we are not the only ones in this case on the market.»»

The impact of the crisis visible in showrooms

The impact of this crisis is also visible in showrooms, especially those of the Renault brand.

According to Mr. Levot, "all brands worldwide have supply problems.However, there have been countries which, for several years, have adopted the ‘Bill to Order’ to sell their vehicles.This technique is to order a car by customer, which will be manufactured by the brand, and will be delivered to it within one or two months.Nothing changes for these countries, if not an extension of the delivery time, which will go from two to three months. "

"In other countries, where customers are used to buying in the stock, especially in Morocco, the situation is different.The customer comes at the showroom and decides to buy at the time.When you have a supply crisis, they are asked to reserve your vehicle for delivery in three or four weeks ", a measure not very appreciated by everyone.

"The Moroccan customer has this particularity of deciding to buy a car quickly.We are not at all in a waiting time management market or manufacturing a tailor -made car.»»

The group's marketing director, however, stresses the "unique" operation of the Dacia brand."In Morocco, we do not have many competitors, unlike most other brands.When a customer wants to buy a Dacia, he often does not hesitate with other brands.This fairly unique positioning means that today people agree to wait a bit to buy a Dacia car, while for other brands, if a car is not available, it is easy to find a similar onein the showroom next door.»»

A national strategy to deal with this crisis?

On this point, Marc Nassif, director general of Renault Maroc, lets us know that "investments in the production sector of electronic components are extremely high, and are estimated at around a billion dirhams.And for a factory to be ready to produce, it takes almost two years. "

"Today, this is not our goal at the Renault brand level, but there are good announcements from the Stmicroelectronics group, which will take advantage of this crisis to diversify what it does in Morocco.»»

“This type of partner is an opportunity for the kingdom.You have to grasp it, and I can tell you that the Ministry of Industry is the ball on this subject, "he concludes.