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New Hybrid-Focused Venture To Be Set Up Between France's Renault And China's Geely

New Hybrid-Focused Venture To Be Set Up Between France's Renault And China's Geely
A year after the French car maker Renault SA closed down its operations in the Chinese market, the company has now decided to try and revive its business there through a hybrid vehicle joint venture with Geely Holding Group, said the French auto giant.  
A framework agreement to set up the joint venture has been signed by the tow companies, Renault said, according to which the JV will make and petrol-electric hybrid cars branded as Renault in China using the technologies, supply chains and manufacturing facilities of Geely while sales and marketing for the cars would be done by Renault.
The possibility of a joint localisation of Geely's Lynk & Co-brand hybrid vehicles in South Korea will also be considered by the two companies as part of the partnership. Renault has been manufacturing and selling its vehicles in the South Korean market for more than twenty years now.
While initially focusing on the Chinese and South Korean market, the joint venture would also likely expand into the other fast growing markets in Asia.
According to reports, manufacturing of full electric battery cars for the venture will also be explored by Geely and Renault.
 The model of the joint venture is based on an electric vehicle focused venture between Geely and Daimler that was struck in 2019. Under the arrangement with Daimler, the joint venture decided to manufacture in China and sell Smart-brand electric vehicles made with the help of Geely technology and using the global sales network of Daimler.
Despite the similarities, the Geely-Renault venture would be absolutely separate from Geely's venture with Daimler.
Through this latest joint venture with Renault, Geely, which is the biggest domestic auto maker by sales in China, hopes to further strengthen its strategy to use its partnerships with other auto companies for sharing of technologies, supply chains and manufacturing facilities which helps to bring down the costs of electric vehicle making and other future focused technologies.
On the other hand, this latest partnership with Geely will help it to rebuild its presence in the Chinese market following the culmination of its joint venture with Dongfeng Motor Group  in 2020.
Reports quoting company documents showed that cars would be made by Renault and Geely "in Geely's existing factories" and ultimately aim to export the vehicles manufactured. It is however unlikely that the companies will disclose which factories would be used for production of the vehicles by the joint venture.
According to reports quoting sources with knowledge of the matter, Geely will control the proposed Renault-Geely joint venture which contrast the arrangement that the Chinese company has with Daimler where both the companies have an equal stake.
Prior to the ending of the Renault-Dongfeng joint venture, both Renault and its global alliance partner Nissan Motor Co had the same Chinese partner Dongfeng.
Designing, production and marketing of cars have for long been made by Renault and Nissan jointly through the alliance that allows sharing of platforms and other vehicle components for reduction of manufacturing and other costs.

Christopher J. Mitchell

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