Renault exploring hybrid-focused venture with Geely to revive its China business
Renault is looking to set up a hybrid vehicle joint venture with China's Geely Holding Group in order to revive its business in the world's largest car market. Under the framework agreement signed to set up the joint venture, the two companies will make and sell Renault-branded petrol-electric hybrid cars in the country.
All technologies, supply chains and manufacturing facilities for the venture will be provided by Geely while sales and marketing of the vehicles will be looked after by Renault. The companies have also agreed to explore a joint localisation of Geely's Lynk & Co brand hybrid vehicles in South Korea where Renault has been manufacturing and selling vehicles for over two decades. Though the venture aims to initially focus only on China and South Korea, it will likely gradually expand to other fast-growing Asian markets.
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The Renault-Geely joint venture will likely also develop full electric battery cars in the future, Reuters reported, quoting a source. The new venture of the companies is modeled on an EV-focused venture that Geely had set up in 2019 with Daimler. However, the Geely-Renault venture will be completely separate from Geely's venture with Daimler.
The joint venture would strengthen Geely's strategy to use partnerships with other automakers to share technologies, supply chains and manufacturing, which reduces development costs of EV and other future mobility technology. For Renault, the partnership would help rebuild its presence in China after it ended a joint venture with Dongfeng Motor Group in 2020. Renault and its global alliance partner Nissan, both had the same Chinese partner Dongfeng, before the Renault-Dongfeng joint venture was dissolved.
The new venture also highlights that carmakers are keen to explore petrol-electric hybrid vehicles as they have better fuel efficiency than the all-petrol counterparts. Notable, these hybrid vehicles, which drivers cannot charge with electricity directly, are different from plug-in hybrid cars.
(with inputs from Reuters)