Renault and Dongfeng Sign Framework Agreement image

A framework agreement has been signed between Renault and China’s Dongfeng Motor Group on their planned joint venture, as part of the French automaker’s goal of assembling cars in the world’s biggest market.

Last month Renault and Dongfeng signed the outline deal planning a joint production of vehicles including an electric car and an SUV, as the French automaker tries to outpace its main rivals in China, where VW is the dominant foreign car maker. In 2011 Renault’s 80 Chinese sales outlets sold about 240,000 imported vehicles, most of them Korean-made Koleos SUVs.

Dongfeng already builds cars in a joint venture with Nissan Motor Co., and Renault raced to reach an outline deal ahead of a change in Chinese rules that hampers new production investments by foreign automakers. The full joint-venture agreement will be concluded by the end of this year and Renault prepares a major investment in China.

Dongfeng and Renault are also taking into consideration cooperating with the Dongfeng-Nissan venture, which assembles SUVs on a similar underlying vehicle architecture to that of the Koleos. Renault plans to unveil on April 23rd, at the Beijing auto show, a new flagship car called Talisman, adapted for China from the SM7 model manufactured by its South Korean unit, Renault Samsung.