Renault has adjusted its strategy for China and will in future concentrate fully on electric vehicles and light commercial vehicles. This includes the French company withdrawing from its joint venture with Dongfeng through which they had built conventional ICEs and transferring its shares in DRAC to Dongfeng.
The Renault Group had already set up joint ventures for the production of electric vehicles and light commercial vehicles in the Chinese market in 2017 and 2018 respectively. Now the French group has cut their losses with the business of fossil-fuelled private vehicles in China.
This means that Dongfeng will cease activities with Renault that were planned with the joint venture Dongfeng Renault Automotive Company. Until now the joint venture produced the Captur, Kadjar and Koleos SUV models and their combustion engine drive trains in Wuhan. The 300,000 current Renault customers will continue to be able to obtain their after-sales service from Renault or Nissan dealers.
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The electric vehicle business will be further developed by the two existing joint ventures eGT New Energy Automotive (where the City K-ZE is manufactured) and Jiangxi Jiangling Group Electric Vehicle (JMEV). Renault Brilliance Jinbei Automotive will develop the light commercial vehicle business. The ties between Renault and Dongfeng are not entirely cut: Dongfeng holds 50 per cent of the shares in eGT New Energy Automotive since the Chinese company also wants to continue working with Renault on connected driving.
“We are opening a new chapter in China,” says Francois Provost, Renault’s China Region Chairman. “We will focus on electric vehicles and light commercial vehicles, the two main drivers of future clean mobility, and more efficiently leverage our relationship with Nissan”.
Renault has not given further details on the future e-strategy in China at this point, but have said: “The further development of Renault brand passenger cars will be explained later in the context of the future new medium-term Renault plan.”
Renault only just returned to China in 2016 under the former CEO Carlos Ghosn as part of the joint venture; before that, the Chinese market was left to the alliance partner Nissan. However, the French company has never achieved its self-imposed target of moving up to 800,000 units per year – in 2019, the figure was less than 180,000 vehicles.
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