China: Renault has bold strategy to increase deliveries image

The French carmaker Renault SA has planned “massive investments” in China, the world’s largest auto market, as it tries to catch up to rivals here in preparation for the first sales of locally built models.

The second largest French automaker has recently announced its sales for 2014 modestly grew by 3.2% to 2.7 million units – with the bulk of the sales surge coming from the core European region. But, as the company has already forecasted a slower gain in 2015 in Europe and a steep fall in Russia, its region’s third-largest market, Renault aims to cut its dependence on the feeble European market. So far, with emerging markets not performing as forecasted and other regions in the world – such as South America – falling behind schedule once again, the global automakers are increasingly turning their strategies towards China.

Here, Renault has lagged far behind other European rivals – including PSA Peugeot Citroen or the German premium trio – when it comes to expanding and setting up local production. Back in July, the company announced it was constructing a Chinese plant in a joint venture with Dongfeng, aiming for initial production of 100,000 units and then increasing the output gradually to more than 500,000 vehicles. “In China, we will have a minimum of 3 percent and very likely 6 percent of the market,” commented Chief Executive Carlos Ghosn on the investment prospects for the world’s largest auto market. Last year Renault only managed to sell 34,000 vehicles in China, even as rivals from PSA managed to deliver 734,000 units – and now the former believes it could catch up to the latter once it starts vehicles through the Dongfeng joint venture in 2016.

Via Reuters