Renault accelerates global growth through new joint venture with Dongfeng in China
16 December 2013 03:00
Plant to be built in Wuhan with initial production capacity of 150,000 vehicles/year
The first vehicles from JV to go on sale in 2016
Project of 7.76 billion CNY (€870 Million)
December 16, 2013, Wuhan, PRC - Carlos Ghosn , Chairman and Chief Executive Officer of Renault, and Xu Ping , Chairman of Dongfeng Motor, today signed a contract for the creation of a new joint venture company for localized production in China: Dongfeng Renault Automotive Company (DRAC). The final approval by the the National Development and Reform Commission of China (NDRC) was granted on December 2nd, 2013.
The investment for the 50/50 JV totals 7.76 billion CNY (€870 Million).
The Dongfeng-Renault joint venture will establish a new manufacturing plant which will start producing vehicles in 2016. The new plant will have an initial production capacity of 150,000 vehicles per year, with the potential for double that in the near future.
This plant will be located in the capital of the Hubei province, Wuhan. The plant will cover a total area of 95 hectares and will lead to the creation of 2,000 new direct jobs. Each partner will bring unique advantages for win-win cooperation and deep synergies: R&D, innovation, design…
DRAC’s product plan will begin with a new range of crossover vehicles under the Renault brand. At a later stage, the new joint venture will introduce a range of products under a local brand. Sales of locally produced vehicles will start in 2016.
The Renault brand has been present in the Chinese market with the imported cars such as Koleos and Fluence. Renault is now swiching gear in China with plans for local production. The Chinese new carmarket, now the world’s largest provides a significant new growth opportunity for Renault.
In 2013, Renault imported vehicles sales will exceed 30 000 vehicles in China (wholesales), thanks to the continuous success of Koleos. The Group is developing its network, set to grow from 92 dealers in 2013 to 120 dealers by 2016.
DFG chairman Xu Ping : “ The launching of the Dongfeng Renault project symbolizes the start of a comprehensive cooperation between DFG and the Renault-Nissan Alliance. The project is a creative endeavor and practice in business model under economical globalization trends. It is a vital milestoneIt is a vital milestone for DFG's self-dependent development in opening process. We expect Dongfeng Renault will bring fascinating products and customer satisfactions for China auto market. We expect the success of Dongfeng Renault ."
Carlos Ghosn, Chairman and CEO of Renault : “ Dongfeng and Renault, as parent companies of DRAC, have been closely working together to ensure the future sucess of DRAC. Our partnership agreement is part of a long term strategy. The challenge is big and we are ready for it.”
The Renault group has been making cars since 1898. Today it is an international multi-brand group, selling more than 2.5 million vehicles in 118 countries in 2012 and employing nearly 128,000 people.
To meet the major technological challenges of the future and continue its strategy of profitable growth, Renault group is harnessing its international development and the complementary fit of its three brands, Renault, Dacia and Renault Samsung Motors, together with electric vehicles, the Alliance with Nissan, and its partnerships with AVTOVAZ and Daimler.
With 12 world championship titles in 35 years, Renault’s expertise in Formula 1 is equally remarkable, as a vector of innovation, image and awareness.
DFM is a main State Owned Enterprise (SOE) under the direct supervision of the State-Owned Assets Supervision and Administration Commission of State Council. It is one of the three giant carmakers in China. By the end of 2012, DFM’s total assets amounted to RMB 228.4 billion yuan and a staff of 160,000. DFG sold over 3,078,500 vehicles in 2012, achieving sales revenue of RMB 389.4 billion yuan. In 2012, DFG ranked No.146, among the Fortune Global 500, ranked No.18 among the Top 500 Chinese Enterprises, and ranked No.4 among the Top 500 Chinese Manufacturers. Dongfeng has sold 2.82 million vehicles this year (as of end-October 2013), representing an increase of 11.03%, and remains in the No. 2 position in China.
DFG has a strong influence and brand recognition in China's auto industry. It ranks among the top 10 most rapid growth brands in China and among the top 500 world famous brands. During the 12th five-year plan period, DFG will implement the strategic goal of "Be strong, be best; become the strongest in the nation and a world- class car manufacturer." "Be strong, Be best" is DFG's main focus, while "Innovation, Self Development" and "Reform Opening, Increase Cooperation" are two major values. It will further utilize strategic allocation to speed up development of sustainable, high quality operations in order to achieve the 5 million cars goal.
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