Renault and Dongfeng to Launch JV in China image

Renault and Dongfeng plan to launch a $1.2 billion car-making JV, as the French automaker aims at expanding in China.

This future joint venture will have an initial production capacity of 150,000 vehicles annually, including passenger vehicles, SUVs and multi-purpose vehicles. The Hubei Environmental Protection Bureau said that the plant will be situated in Wuhan, the capital of Hubei province. Also it Hubei are located Dongfeng’s JVs with Honda and PSA Peugeot Citroen.

Dongfeng, which is the second largest automaker in China by production and sales, also builds cars with Kia and Nissan. Today, January 21st, China Business News reported that the Dongfeng-Renault JV will break ground in May. Renault, which sold 29,724 vehicles in China in 2012, up 22%, is among the few foreign automakers that do not have a plant in China.

Renault needs to quickly expand in China to be able to reach rivals such as PSA, which sold 440,000 units last year, or GM, the largest foreign automaker in this country, which sold 2.84 million units. Nissan, with which Renault is in partnership, has made an alliance with Dongfeng since 2002.