Renault Dongfeng JV for local car production in China
To expand their global growth, Renault has formed a new joint venture with China’s Dongfeng Motor Co. to produce cars locally in China. The 50/50 JV will see a total investment of 7.76 billion CNY (€870 Million or INR 7,940 crores or $1.28 billion).
Under the new Renault-Dongfeng JV, the first plant will be built at Wuhan. The new plant will have an annual production capacity of 150,000 vehicles. The cars will be sold under the banner of Dongfeng Renault Automotive Company (DRAC), with first car to go on sale in 2016. Production will be doubled in the near future if need arises.
China is the largest car market in the world today and to increase their presence here, will directly reflect positively on their global sales charts. Renault is present in China via their cars like Koleos and Fluence. This year, Renault has sold over 30,000 cars in China, thanks to the success of Koleos. And with the new JV, they can only hope of increasing their sales in China. Renault Group is also developing its network, which is set to grow from 92 dealers in 2013 to 120 dealers by 2016.
DFG chairman Xu Ping: “The launching of the Dongfeng Renault project symbolizes the start of a comprehensive cooperation between DFG and the Renault-Nissan Alliance. The project is a creative endeavor and practice in business model under economical globalization trends. It is a vital milestoneIt is a vital milestone for DFG’s self-dependent development in opening process. We expect Dongfeng Renault will bring fascinating products and customer satisfactions for China auto market. We expect the success of Dongfeng Renault.”
Carlos Ghosn, Chairman and CEO of Renault: “Dongfeng and Renault, as parent companies of DRAC, have been closely working together to ensure the future sucess of DRAC. Our partnership agreement is part of a long term strategy. The challenge is big and we are ready for it.”