Economy, Auto

Renault-Nissan Alliance to Invest $800m in Argentina

Renault-Nissan Alliance to Invest $800m in ArgentinaRenault-Nissan Alliance to Invest $800m in Argentina

Renault-Nissan alliance chairman and CEO, Carlos Ghosn, confirmed that the alliance will invest $800 million in Argentina through 2018.

Ghosn’s visit to Argentina is his first since President Mauricio Macri’s inauguration and comes as the alliance prepares to launch its first pickup truck manufacturing line to produce vehicles for Nissan, Renault and Alliance partner, Daimler with an investment of $600 million.

“It also will mark the first time Nissan will build vehicles in Argentina,” he said.

Renault Argentina also announced it will invest another $100 million in a new model to be produced at the Santa Isabel plant in Cordoba. This latest investment follows a $100 million investment announced in March 2015 for the production of Renault Sandero, Sandero Stepway and Logan models at the plant.

Ghosn met with President Macri in Buenos Aires to reiterate the alliance’s commitment to Argentina, provide insights into future plans and thank the president for his forward-looking approach on trade and investment.

“The Renault-Nissan Alliance is deeply committed to Argentina and the local partners who are joining these ambitious projects,” Ghosn said. “As the third-largest automotive market and the center of pickup manufacturing in Latin America, Argentina is key to the regional growth plans of our brands.”

During his visit, Ghosn also toured the Santa Isabel Industrial Complex where preparations for new investments are underway. He also met with key automotive suppliers that will support the alliance’s pickup production.

Meanwhile, Renault’s first-half operating profits jumped 41% to €1.54 billion ($1.7 billion), thanks to a refreshed model lineup and a rebounding European auto market.

Renault is reaping the rewards of a product offensive that has seen all its major vehicles revamped, including the Espace and Scenic minivans and the introduction of SUVs such as the Kadjar in the hot SUV/crossover market.

The automaker’s net income rose 8.8% to €1.5 billion ($1.74 billion), the company said in a statement, on a 13.5% gain in revenue to €25.19 billion.

Operating margin increased to 6.1% from 4.9%, its highest under current accounting standards. Profit at the core automotive division was up 65% for a 4.7% margin.

“The results demonstrate the relevance of the company’s strategy for regional diversification and launching new models,” Ghosn said in the statement.

The carmaker reiterated 2016 goals, including an increase in revenue and operating margin and a positive automotive free cash flow, which amounted to €381 million in the first half.

Renault is introducing 10 new and revamped models this year, as it seeks to benefit from a recovery in the European car market, which grew by 9.1% in the first half.