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According to several media reports, Geely Automobile and France's Renault Group will soon announce a new partnership. South Korea's Pusan Renault assembly plant will produce Geely's Leck 01 hybrid model. Geely is considering the possibility of bringing Korean-made cars into the US market duty-free, so Geely can push into new markets.

On August 9 this year, Geely confirmed that it had signed a memorandum with Renault. In the brief memorandum issued at that time, it only pointed out the direction of cooperation discussed between the two sides, including the landing of the new Renault brand in the two markets, the development of Renault hybrid models based on Geely platform, and the launch of models based on Lecker platform to the South Korean market. In September, the French newspaper Echo reported that Renault was cleaning up its troubled business in the Chinese market, a statement that included two layers of meaning, including terminating some existing businesses and finding a more suitable partnership. Renault began negotiations to end its cooperation with brilliance China.

Last year, France's Renault announced its withdrawal from the Chinese passenger car market. Dongfeng Renault sold only 663 cars and produced 14 in the first quarter of last year. In April, Renault officially announced that it would end its partnership with Dongfeng Motor and stop selling Dongfeng Renault models. According to the financial report, the global sales of France's Renault in 2020 was 2.95 million, down 21.3% from the same period last year, with a loss of 8.05 billion euros. Renault suffered its first loss in 10 years in 2019, but lost only 141 million euros that year, and its operating conditions deteriorated rapidly in 2020. For this reason, Renault also sold the French headquarters building. Renault's traditional market is in Europe, where local dealers account for 50% of the total sales channel, and its second largest market is Russia.

In terms of economic performance, the world has shrunk sharply due to the impact of the epidemic, and only China's auto market has quickly returned to growth after controlling the spread of the COVID-19 epidemic. However, before this trend, Renault announced that it would withdraw from the Dongfeng Renault joint venture and withdraw from the Chinese passenger car market, missing out on growth opportunities in the Chinese market, of course, because of its small market share. Even if it does not quit, it is only a drop in the bucket for its entire group performance. Facing the predicament, Renault put forward the "Renaulution" strategic plan. The core of the plan is to use existing assets to focus on the launch of local models in the field of electric vehicles and light commercial vehicles. Renault has lost its passenger car market in China, while brilliance, another Renault partner in the commercial vehicle sector, did not perform well, and as of yesterday, media reported that it had suspended payrolls and advised employees to leave voluntarily. In addition to its cooperation with brilliance, Renault also retains easyit and Jiangling Group's new energy projects. In 2020, Egett's Renault sales fell 95.3% to 1205, while Jiangling New Energy sales fell by 74.2% to 3842 in the same period. Renault urgently needs to make progress in some new areas in the short term.

According to foreign media reports, Geely and Renault will announce the establishment of a new hybrid vehicle joint venture to bring Renault back to the Chinese market. On the other hand, the two sides will use Renault's Busan plant in South Korea to jointly produce Geely hybrid cars, which was stated in the earlier memo to focus on the Chinese and South Korean markets.

Renault owns 80.4% of Renault Samsung in Busan, South Korea, and Renault Samsung ranks Hyundai, Kia and GM in South Korea. Renault Samsung's total car sales, including exports, were 116000 in 2020, down by half from 2017, and a slight rebound in total sales of 120000 vehicles in the first 11 months of this year. In November, sales of South Korea's five largest vehicle factories were 600300, down 11.4 per cent from a year earlier.

Renault Samsung, originally a Samsung car, was founded by the late Samsung Group Chairman Lee Kun-hee in 1995, and it was not long before it was hit by the Asian financial turmoil. In 1999, Renault offered $512 million for a stake of 70.1%, immediately became a major shareholder, and then further increased its stake to 80.4%. In order to retain the original users and the popularity of the Samsung brand in South Korea, Renault has always used Renault Samsung as its car brand. Renault signed a 10-year trademark use agreement with Samsung. Renault has to pay 0.8% of its sales as a trademark license fee, and in 2010, the license had to be extended for 10 years to 2020. However, the two sides did not renew the trademark agreement after it expired in August last year, when there was speculation that Samsung might withdraw from Renault Samsung. In August, Samsung officially announced that it planned to sell all of its shares in Renault Samsung, marking the end of its 27-year auto business. Busan, the last remaining territory of South Korea at the worst of the Korean War, is a port city through which Renault Samsung used to export to Europe. Renault Samsung announced that it would stop production because of chips in the middle of this year, after three years of workers' strikes, losing nearly 80 billion won last year. If you don't make money, there are still many things, because retaining this business also affects the willingness of other mainframe manufacturers to purchase Samsung chips. More importantly, Lee Jae-yong, vice chairman of Samsung Group, obviously has no ambition for the automobile industry. Renault Samsung expects to change its name to Renault Korea in the future, and Samsung may symbolically continue to hold a small stake.

According to data released by the Korea Automobile Industry Association, domestic car sales in South Korea in the first half of 2021 fell 2.6% year-on-year to 924000 units, the same as the average in the past three years. The traditional Korean market prefers Korean national brands, and in recent years, only high-end German cars have increased. Geely has a number of overseas factories, and what is close to this situation is Malaysia Proton, but it is a different prospect in the Malaysian market, where there is less competition among local brands. Geely can cut into the growing Southeast Asian market here. After receiving support from Geely's funds and car models, Proton's market share for the whole year of 2020 was 20.5%, almost double that of 2018. Second only to another local brand, Beilu Perodua.

The business between Geely and Renault is clearly not based on the outlook for the South Korean market, because it is too smooth and has little room for growth. According to the media, Geely may be studying whether it can make use of the free trade agreement signed between South Korea and the United States to export Lecker hybrid cars duty-free to the US market. Chinese carmakers such as Chery have shelved plans to enter the US market because of the epidemic and heightened tensions between the US and China, an obstacle Geely may be able to circumvent with the participation of French Renault and South Korean factories.

Geely has yet to release details of the plan, and on Friday, listed company Geely announced that its acquisition of 220 million shares of extreme krypton common shares from Geely Group was approved by shareholders. In addition, Li Shufu, chairman of Geely holding Group, will increase his stake in Geely Motor by 2%. Geely said it showed shareholders' confidence in the company's future development.

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