Renault enters into a JV with Dongfeng to produce SUVs in China

Renault will build SUVs in China in association with Dongfeng, production for which, will commence at the joint venture facility in the central-city of Wuhan with Dongfeng Motor Corporation. Renault aims to sell locally-made vehicles by 2016.

The Chinese government approved the joint venture last month. Following the government’s nod, Renault and Dongfeng will work in a “golden triangle” to bring harmony between cost and technology. The joint venture will be a 50-50 partnership between the two companies, the assembly plant, with an investment of 7.8 billion yuan (Rs 8025 crore) will have a production capacity of 1,50,000 units and similar number of engines. 

In China, most major car brands have joint venture operations , and to be a prominent player you need to produce cars in any country. Nissan, currently the best selling Japanese carmaker in China and Renault’s global partner has been associated with Dongfeng for the last 10 years. Nissan has delivered more than one million vehicles in China till date.

Renault’s heavy reliance on the European market will be reduced once they start production in China. The French carmaker has been importing CBU units in China so far and the beginning of local production will help them price their products competitively. The licence is limited to building SUVs; however, Renault would like to sell their complete range of cars in China. The European market is on an all-time low; on the other hand the Chinese car market is the biggest in the world today. This new development will help Renault in a big way. There were no details on the day the production will commence though.

Source : Automotive News China