Renault is in talks with China's Dongfeng Motor to manufacture its automobiles in Dongfeng's assembly facility in the central China city of Wuhan, as reported by the country's official Xinhua news agency. The French vehicle manufacturer also intends to sell its cars through Dongfeng's Aeolus-brand dealerships, the wire service further revealed, citing sources from Dongfeng.
The plan will enable Renault to start local production without having to construct its own assembly plant. In addition, it would also let Dongfeng optimize its utilization of the facility, according to Xinhua. The plant owned by Dongfeng has a production capacity of 120,000 vehicles annually.
However, sales of Dongfeng's Aeolus brand dropped by 6 percent to 26,028 units in 2011, the LMC Automotive reported. Without an assembly facility in China, Renault imported 19,262 cards into the nation last year, an increase by 35 percent.
Dongfeng has a joint venture with Nissan, which is the corporate partner of Renault. Renault has made some first steps to expand in China. In 2011, it grew its network of dealerships in the nation to 80 from 50.