Renault Makes JV With Dongfeng to Build Vehicles in China image

Renault plans to create a joint venture with Dongfeng Motor Group to manufacture cars in China.

According to a local news paper, China Business News, the two automakers plan to invest 6.5 billion yuan ($1.0 billion) to build a plant in the central province of Hubei, which will initially manufacture 200,000 vehicles annually. Renault’s spokesman in China declined to comment, while Dongfeng’s spokesman said he had no information regarding this joint venture.

Other companies which have joint ventures with Dongfeng are Nissan, PSA Peugeot Citroen and Honda. All foreign automakers are required to make joint ventures with Chinese automakers if they want to manufacture vehicles in this country.

Renault had manufactured cars in China in the mid-1990s through a joint venture with a little-known state-owned maker of special purpose vehicles that is why the automaker doesn’t have to be given new production license from the government, as it can use the one from the previous JV.

It is expected that by the end of 2012 Renault would have its first car manufacturing plant in the world’s biggest car market following its aim to acquire a share of the large sedan market. In February 2012, Renault’s CEO Carlos Ghosn said the group might manufacture electric cars and sell some top of the line models in China.