Renault may end Brilliance joint venture in China
Renault appears to be willing to break up its electric van joint venture in China. According to news agencies, the French company was in advanced talks to end its JV with China’s state-backed Brilliance, which was established at the end of 2017.
Reuters refers to a source familiar with the proceedings. Renault was overhauling its struggling Chinese operations, so the quote. Another source told Les Echos that the possible end would be discussed at a board meeting of the joint venture this month.
Questions appear to have arisen at Renault after Brilliance announced it would not make any further investments in the joint venture. Brilliance parent Huachen Group has debts in the billions. Meanwhile, Chinese authorities are also investigating whether Huachen has violated debt disclosure laws.
The joint venture goes back to July 2017 when Renault reportedly acquired a 49 per cent stake in Brilliance’s loss-making van division. The Renault-Brilliance-Jinbei Automotive joint venture was then established in December of the same year to build up to 150,000 increasingly electric compact vans.
Renault in a statement said it would not comment on market speculation but added that the joint venture with Brilliance was “still beset by challenges” despite a transformation plan set in June 2020. Brilliance refrained from comment.
Reuters also suggests the Chinese market has proven difficult for Renault. The company last year ditched combustion engine cars in China following poor sales at its loss-making venture with Dongfeng Motor Group. At the time, the French announced that they would focus on electric cars and light commercial vehicles, leaving alliance partner Nissan to cover the other segments. There was also a fresh attempt to crack the market with Geely announcing in August a hybrid vehicle joint venture to focus on sales across China and South Korea.
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