The relationship between Geely and Renault, which started with the signing of a memorandum of understanding (MoU) in August 2021, has been finalised. The Renault Group and Geely Auto have now entered into a share subscription agreement and a joint venture agreement subsequent to a framework agreement signed in January this year.

On completion, Geely Automobile Holdings via its subsidiary Centurion Industries Limited, will hold 34.02% of the total issued share capital of Renault Korea Motors (RKM, also known as Renault Samsung Motors). Renault Group will remains as the majority shareholder in RKM and will continue to fully consolidate the entity.

In January, Geely Auto’s parent company Geely Holding Group and Renault Group jointly announced a new collaboration dedicated to bringing an all-new vehicle line-up of fuel-efficient hybrid and ICE-powered models to the South Korean market, as well as exploring overseas sales. The new models will be produced at the current RKM facility in Busan, South Korea, with volume production expected to start in 2024.

These new models will be based on Geely’s Compact Modular Architecture (CMA) and will use the Hangzhou-based carmaker’s hybrid powertrain tech. Renault and RKM’s contribution will be in “cutting-edge technologies, expertise in design and customer experience, to exceed the local market expectations”.

The new product range will be sold through the existing RKM sales network. RKM after-sales have been ranked first for six consecutive years until 2021 in the South Korean domestic automotive consumer survey Consumer Insight.

“This capital increase reflects strong confidence by Geely Holding Group and Renault Group in the South Korean market’s strong potential which will further enhance Renault Group’s ‘Renaulution plan’. Both companies are fully committed to RKM by introducing new product portfolio that will lead to greater market share in the South Korean domestic market whilst exploring export market opportunities,” the companies said in a statement.

There have been talk about Geely exporting duty-free to the US via this “backdoor”, as South Korea has a free-trade agreement with the US – more on this here.

GALLERY: Lynk & Co 01 facelift