AutoBeta(AutoBeta.net)01/22 Report--

According to media reports, on the afternoon of January 21, Renault Group and Geely Holdings Group (hereinafter referred to as "Geely") announced that they had signed an agreement to form a joint venture company to develop, produce and sell Renault-branded fuel vehicles and smart hybrid vehicles in South Korea based on Geely's CMA architecture and hybrid technology, and exported to markets outside South Korea. So far, the two sides have not made it public.

The new product will adopt the modular structure of Geely holding Group CMA, while giving full play to Renault's advantages in forward-looking technology, styling design and user experience to accelerate the landing of Renault's "Renaulution project" in the South Korean market, the Financial Associated Press reported. At the beginning of the cooperation, the two sides will build new models tailored to the South Korean market, and Renault Samsung will also consider exporting them to other overseas markets in the future. Earlier, media have pointed out that Geely will build a hybrid model at Renault Samsung's factory in Busan, South Korea, and the car is Lecker 01 PHEV, which may also be exported to the US market from South Korea in the future. In addition, Geely and Renault will also form a new brand, whose products will basically be equipped with plug-in hybrid systems and jointly managed by Geely and Renault. From the news of Raytheon Power and Raytheon Intelligence engine Hi X intelligent hybrid platform announced by Geely in October last year, industry insiders speculated that the new brand jointly formed by Geely and Renault may adopt a hybrid system with Raytheon Power.

About the establishment of Renault and Geely, in fact, there was news as early as 2021. On August 9 last year, Geely issued a memorandum of cooperation between Geely and Renault. According to an announcement issued by Zhejiang Geely holding Group, the two sides will establish a long-term partnership and cooperate in China and South Korea, including the development of Renault hybrid models by Geely platform and the launch of models based on Lecker platform to the South Korean market. However, due to Renault's withdrawal of Dongfeng Renault in 2020, the negotiations were shelved until Su Weiming became chief executive of Renault China in March 2021.

In response, Renault said the partnership is an important step in improving the penetration of hybrid cars in Asia and is part of Renault's recovery plan, which aims to upgrade Renault's Samsung brand and product portfolio. In fact, Renault had already had joint ventures with a number of Chinese car companies before partnering with Geely, but Renault took the initiative to scale back its business in China in 2020, given the poor performance of the Chinese market. In April 2020, Renault Group announced the termination of its partnership with Dongfeng Motor, Renault transferred its 50% stake in Dongfeng Renault to Dongfeng Automobile Group, and Dongfeng Renault stopped the business activities related to the Renault brand. Renault ended its fuel passenger car business in the domestic market. After that, Renault said that it would focus on the two pillar businesses of electric vehicles and light commercial vehicles in the Chinese market, of which the light commercial vehicle business will be carried out through brilliance Renault Gold Cup Automobile Co., Ltd. the electric vehicle business is carried out through the other two joint ventures, easy Jet New Energy vehicle Co., Ltd. And Jiangling Group New Energy vehicle Co., Ltd.

However, in the field of commercial vehicles, brilliance Renault Gold Cup, a joint venture between Renault Group and brilliance Group, also did not perform satisfactorily. On January 12, 2022, brilliance Renault Gold Cup Company filed for bankruptcy. According to the court announcement, the liquidation group of Huachen Renault Golden Cup Automobile Co., Ltd., led by Gao Wei, director of the Comprehensive laws and regulations Department of Liaoning Province State-owned assets Supervision and Administration Commission, has been appointed by the Shenyang Intermediate people's Court as the administrator of the reorganization.

In the Chinese market, Renault only has two fulcrums: Egett and Jiangling Group New Energy Company, but the business volume of both companies is relatively small. To sum up, whether in the field of electric vehicles or light commercial vehicles, Renault's performance is not satisfactory in these two areas. In the South Korean market, Renault Samsung sold 116000 vehicles in 2020, down about 50% compared with 2017, while global sales in 2021 were 2.696 million, down 4.5% from the same period last year. Renault is seen as a key step in breaking the difficulties in the Chinese market.

For Renault, Geely has ready-made hybrid and electric brands, and Renault can reopen the Chinese market more quickly.

As for Geely, because the Korean market is too stable and there is little room for growth, the prospect of the Korean market is not Geely's most concerned focus. According to previous Reuters reports, Geely's main concern is whether it can use the free trade agreement between the United States and South Korea to export Lecker hybrid cars duty-free to the United States market, which is affected by the epidemic and Sino-US policies. Chinese carmakers such as Chery have shelved plans to enter the US market, and Geely has a chance to enter the US market if Renault and South Korean factories are involved.

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