Renault is considering the possibility of building a plant in Venezuela to increase its production capacity outside struggling Europe.
Renault already has three plants in Latin America, in Argentina, Brazil and Colombia, as well as six factories in France. The French automaker said in a statement on Monday that it has signed a “letter of intention for the installation of a vehicle assembly plant” together with the Venezuelan industry ministry.
“This signature will enable a feasibility study for local production of vehicles,” Renault said in the press release. The carmaker said last week it expected the global auto market to expand by around 30 percent by 2020, even though in Europe the market has reached a 20-year low.
Like other carmakers that depend on the European market, Renault is trying to establish itself in emerging markets, where demand remains strong for cheap models. The carmaker already expects to make half of its sales outside Europe this year.
Renault has a wholly-owned subsidiary in Venezuela, Renault Venezuela SA, which has sold more than 132,000 vehicles since the start of its operations in the country. Renault has developed a local network of 20 dealerships and service centers as well as a professional and technical training center.