Thursday, December 19
Renault's new joint venture with Dongfeng
Carlos Ghosn, Chairman and Chief Executive Officer of Renault, and Xu Ping, Chairman of Dongfeng Motor, today signed a contract for the creation of a new joint venture company for localised production in China: Dongfeng Renault Automotive Company (DRAC). The final approval by the the National Development and Reform Commission of China (NDRC) was granted on 2 December 2013.
The investment for the 50/50 JV totals 7.76 billion CNY (€870 Million).
The Dongfeng-Renault joint venture will establish a new manufacturing plant which will start producing vehicles in 2016. The new plant will have an initial production capacity of 150,000 vehicles per year, with the potential for double that in the near future.
This plant will be located in the capital of the Hubei province, Wuhan, covering a total area of 95 hectares and will lead to the creation of 2,000 new direct jobs. Each partner will bring unique advantages for win-win cooperation and deep synergies: R&D, innovation, design…
DRAC’s product plan will begin with a new range of crossover vehicles under the Renault brand. At a later stage,the new joint venture will introduce a range of products under a local brand. Sales of locally produced vehicles will start in 2016.
The Renault brand has been present in the Chinese market with the imported cars such as Koleos and Fluence. Renault is now swiching gear in China with plans for local production. The Chinese new car market, now the world’s largest, provides a significant new growth opportunity for Renault.
In 2013, Renault imported vehicles sales will exceed 30,000 in China (wholesales), thanks to the continuous success of Koleos. The Group is developing its network, set to grow from 92 dealers in 2013 to 120 dealers by 2016.
DFG chairman Xu Ping: “The launching of the Dongfeng Renault project symbolises the start of a comprehensive cooperation between DFG and the Renault-Nissan Alliance. The project is a creative endeavour and practice in business model under economical globalisation trends. It 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 the 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.”