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On April 14,2020, Dongfeng Renault shareholders issued a document announcing that the joint venture company officially ceased operation, Dongfeng Renault delisted and reorganized, becoming the first joint venture brand to withdraw in 2020. However, more than 90 dealers of Dongfeng Renault are struggling and have written to Dongfeng Renault twice, demanding Dongfeng Renault and Renault (Beijing) to compensate for the losses caused to dealers nationwide due to unilateral breach of contract. It is said that the claim amount is as high as 1.4 billion yuan.

Dongfeng Renault National Dealer Official Letter issued by more than 90 dealers in Dongfeng Renault put forward 7 claims, requiring Dongfeng Renault and Renault (Beijing) to return rebates, cash, security deposit, etc. on dealer system accounts; All original prices of existing stock vehicles, accessories and original high-quality products shall be recovered within the time limit; Dealers fail to arrive at the account to build stores, input expenses for stores under construction, personnel salaries, operating expenses, compensation for personnel severance, etc. According to incomplete statistics, the amount involved is about 1.406 billion yuan.

According to the announcement issued by Dongfeng Group and Renault Group on April 14, after negotiation between both parties, Renault Group has transferred 50% of its shares held in Dongfeng Renault Automobile Co., Ltd. to Dongfeng Group, and Dongfeng Renault has stopped business activities related to Renault brand. At the same time, Renault will continue to provide customer service to 300,000 Renault owners in China through Renault dealers and utilizing the alliance's collaborative mechanism. The development of Renault brand passenger cars will be described in detail in Renault's new medium-term development plan.

In response to the demands put forward by dealers around the world, the relevant responsible person of Renault said that since the equity has been transferred to Dongfeng Group, the specific affairs shall be negotiated and handled by Dongfeng Group and dealers in principle; at the same time, a project team has been established to connect with the after-sales work of dealers.

Dongfeng Renault relevant personage thinks,"Enterprise reorganization belongs to the normal phenomenon of market economy, There are challenges, But all in order." It is said that Dongfeng Renault has completed a rehabilitation plan and submitted it to Dongfeng Group for approval. Dongfeng Renault currently requires employees to reduce attendance, rest at home and pay basic wages.

Dongfeng Group replied that on April 17, it had issued an account declaration notice to the dealer, and would negotiate and discuss the debt settlement scheme on the basis of the third-party asset evaluation and according to the creditor's rights and debt amount declared by the dealer.

According to dealers, Dongfeng Renault has been insolvent, with debts as high as 8 billion yuan, while assets are only 2 billion yuan and no cash. Dongfeng Renault's main assets have been mortgaged to Dongfeng subsidiaries and several banks, which will have priority over assets if bankruptcy proceedings are entered. Dealers said that the previous negotiation results only returned dealers principal and confirmed rebate 27%, if Dongfeng Renault into bankruptcy proceedings, dealers can only get 17%.

A Dongfeng Renault dealer told the media that the current industry difficulties, enterprises to terminate the contract is not incomprehensible, but enterprises should properly handle the relationship with partners. The dealer did not get the news in advance, and the Chinese and French shareholders announced the dissolution directly. The dealer had no time to deal with the inventory vehicles on hand, so it could only be treated at a discount in the future. Dealers have not yet received funds such as manufacturer rebates in 2019. The dealer said that before the announcement by both parties, it paid Dongfeng Renault a purchase price, and has not received either the car from the manufacturer or the returned purchase price.

Due to the substantial decrease in sales volume, difficulties in enterprise operation and continuous loss, Dongfeng Renault timely withdraws from stop loss, which is also a clear decision, but follow-up issues should be negotiated with dealers in advance. Some industry personage thinks,"dealer as independent market subject, in the market competition also have to bear the risk brought by competition."

Data show that Dongfeng Renault sold only 18,500 vehicles in 2019, down 63% year-on-year. Affected by the epidemic situation and headquartered in Wuhan, the cumulative sales volume of Dongfeng Renault from January to March 2020 was only 663 vehicles, with a year-on-year decline of 88.65%. The domestic models included Kolejia, Koleo, Kolebin and e Nuo respectively. As Dongfeng Renault has stopped Renault brand-related business activities, the above models have also been discontinued immediately.

A paper announcement cannot solve all problems. We will continue to pay attention to the negotiation results between Renault, Dongfeng Group, Dongfeng Renault and dealers nationwide. Enclosed is one of the letters previously sent by all Dongfeng Renault dealers:

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