Following the Chinese’s government approval of the joint-venture last month, Renault will be producing SUVs at its joint-venture factory with Dongfeng Motor Corp, according to Automotive News China. The French carmaker is aiming to sell locally-made vehicles in the country by 2016.
Renault and Dongfeng will work closely with Nissan in a “golden triangle” to gain synergies in cost and technology, Renault-Nissan CEO Carlos Ghosn told ANC. Nissan already builds cars with Dongfeng in China.
According to the China Association of Automobile Manufacturers, French carmakers accounted for only 3.1% of passenger car sales in the first 11 months of 2013.
By manufacturing cars in China, Renault will be able to reduce reliance on Europe, where half of its global sales are, and where the car market is at a two-decade low. Production in China will also allow the French carmaker to avoid a 25% import duty so it can sell its cars at more competitive prices.
Dongfeng president Xu Ping told ANC that the venture currently only has a license to build SUVs, but the ultimate aim is to produce the full passenger vehicle range in China.