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Today, Geely announced that its subsidiary Centurion Industries Limited (CIL) signed a share subscription agreement with Renault Korea Motor, agreeing to subscribe for 45.375 million shares of Renault Korea Motor for 1.376 billion yuan. Geely will own 34.02% of Renault Korea Motor after the deal is completed. Renault Group still occupies the majority shareholder position, Renault South Korea Automobile will continue to be listed by Renault Group.

Geely Automobile related personnel responded to the signing of the share subscription, "the cooperation between the two sides is co-ordinated by Renault, Geely models and technology to promote the local economy and employment."

In fact, on August 9 last year, Geely holding Group and Renault Group jointly announced that the two sides had signed a memorandum of understanding to establish an innovative partnership. On January 21 this year, Geely announced again that it had signed a memorandum of understanding with Renault Group to establish a long-term strategic partnership. In addition, the announcement also revealed that Geely will join hands with Renault to launch a new range of models in the South Korean market, with early plans to focus on the development and sale of internal combustion engines and hybrid cars in core fast-growing markets such as South Korea.

In recent years, the situation of Renault brand is not optimistic. The performance in the Chinese market has not been satisfactory, and Renault took the initiative to scale back its business in China in 2020. 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, thus ending the fuel passenger car business in the domestic market.

Subsequently, Renault said 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., but for now, whether it is Huachen Renault, Jiangling Renault or easy Jet The development in the market is not satisfactory. Last December, brilliance Renault Gold Cup Co., Ltd. filed for bankruptcy restructuring. In addition, Renault's current global sales are not optimistic. Renault sold 550000 vehicles worldwide in the first quarter of this year, down 17.1 per cent from a year earlier, according to relevant data.

In this context, Renault also hopes to make a comeback through electrification. In its "Renaulution" strategy released in 2021, Renault said it would launch 24 products by 2025, half of which will be distributed in C-and D-class market segments, including at least 10 pure electric vehicles; the Renault brand will provide more than 65 per cent of pure electric and electrified products in Europe; and the proportion of Renault-branded electric vehicles will reach 90 per cent by 2030.

For Geely, it has been speeding up its pace out of overseas markets. Long-term through the "buy" way of acquisition and "make friends" way to cooperate with car companies, and constantly enhance their own strength. In addition to buying Volvo and Proton cars. Also formed a joint venture with Daimler, Lifan set up a joint venture, FF cooperation. Some people in the industry said that it was a "win-win" situation for the cooperation between the two sides. For Renault at this stage, facing a steady decline in sales, there is an urgent need for the injection of "fresh blood" to reverse its decline. For Geely, going overseas is a necessary stage to achieve a big brand, and Renault happens to be the best springboard to enter the Korean market.

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