Citroën C4 Production Set to Move to North Africa: A Strategic Shift for Stellantis
The next generation of the Citroën C4 is poised to leave its long-standing production base in Spain for a new home in North Africa. This move places the C4 at the heart of a growing industrial ecosystem that combines automakers and French engineering firms, potentially reshaping Stellantis’ strategy for the region.
North Africa: Stellantis’ Strategic Hub
Despite efforts by the French government to encourage the reshoring of production, such as bringing the electric Peugeot 208 back to France, Stellantis is taking a different path. While the 208 remains in Slovenia, the future Citroën C4 is expected to cross the Mediterranean, following Stellantis’ substantial investments in North Africa.
Since 2022, Stellantis has committed significant resources to the region, starting with a €300 million investment in its plant in Kenitra, Morocco. This facility already produces microcars and base versions of the Peugeot 208, and it is now gearing up to accommodate a C-segment model, which is expected to be the Citroën C4 after 2026.
North Africa offers a strategic location for Stellantis, serving not only the Middle East and African markets but also maintaining proximity to Europe via key shipping routes like the Strait of Gibraltar and the Port of Marseille. With the group’s operations in China underperforming, this move diversifies Stellantis’ production footprint, reducing reliance on traditional European and North American markets.
Explore Stellantis’ global strategy.
A Cost-Driven Decision
The decision to relocate C4 production stems from cost considerations. Labor in Morocco is significantly cheaper than in Europe, including Spain, enabling Stellantis to achieve double-digit profit margins, according to CEO Carlos Tavares. Moreover, Morocco has attracted automakers with enticing fiscal incentives, such as a five-year tax exemption, a 15% corporate tax rate thereafter, and exemptions from VAT and customs duties.
Spain, where the current C4 is built at the Villaverde plant in Madrid, struggles to compete with such advantages. The relocation could also be a double blow for the plant, as the Lancia Delta, initially slated for production in Villaverde, is now set to be manufactured in Italy.
Learn more about Morocco’s industrial policies.
Citroën’s Positioning: Aiming for Dacia’s Territory
Citroën, long reluctant to be compared to Dacia, now appears to be targeting the Romanian brand’s successful value-oriented strategy. However, questions remain: can Europe accommodate a second “Dacia” given the latter’s dominance in the budget segment?
The future C4 is expected to compete directly with Dacia’s upcoming C-Neo, adopting a similarly cost-efficient philosophy. With production costs slashed in North Africa, the C4 aims to undercut competitors while retaining enough features to remain appealing to value-conscious buyers.
Read about Dacia’s growing market influence.
Broader Implications for Europe’s Automotive Industry
Stellantis’ move highlights a broader trend among European automakers. Renault, for instance, has already shifted production of models like the Dacia Sandero, Mobilize Duo, and Renault Express to Morocco.
The growing presence of French engineering firms such as Capgemini, which played a significant role in designing the Citroën Ami, further cements Morocco’s status as a burgeoning industrial hub. This raises critical questions: how far will European automakers go in relocating production to North Africa? And will the C4 be the only major European loss in Stellantis’ lineup?
Discover Capgemini’s role in automotive innovation.
Conclusion: A Strategic Yet Controversial Move
The shift in Citroën C4 production underscores a significant shift in Stellantis’ strategy, leveraging North Africa’s competitive advantages to optimize costs and expand market reach. While this move may strengthen Stellantis’ global positioning, it also underscores the challenges facing European manufacturing in an increasingly globalized and cost-driven industry.
What remains to be seen is how this decision will impact Citroën’s brand identity and whether European consumers will embrace a C4 produced outside the continent. In the meantime, the North African industrial ecosystem is rapidly gaining prominence, reshaping the global automotive landscape.
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