Renault aims to strike final deal with Dongfeng Motor and build cars in China

Article by Christian A., on February 1, 2012

Renault seeks to negotiate a final agreement with Dongfeng Motor Group Co. this year in order to manufacture automobiles in China, according to the Xinhua news service citing a senior Renault executive, During a meeting of the French National Assembly's Economic Affairs Committee, Renault's COO Carlos Tavares has said that they hope to be able to reach a final deal this year. He added that the agreement will enable them to establish themselves "industrially" in China.

Last month, Renault and Dongfeng inked a memorandum of understanding to build a joint venture in the central China city of Wuhan. Dongfeng currently has a successful joint venture with Nissan, which is Renault's corporate partner.

The Japanese vehicle manufacturer is the third bestselling brand in China, posting sales of 835,217 units in 2011. It achieves third place, running behind Toyota and Volkswagen. On the contrary, Renault sold only 24,275 automobiles in China last year -- all of which are imports.

Nissan and Renault CEO Carlos Ghosn had previously stated that Nissan would take the lead in China, says Autonews. In order to complete any deal, Renault will have to go through the regulatory red tape.

In an effort to steer clear from excess production capacity, the central government of China recently set tougher limits on foreign automotive investment. Even so, Renault has made some initial strides to expand in China. In 2011, the company increased its dealership network in China from 50 to 80.

Topics: renault, china

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