AutoBeta(AutoBeta.net)11/08 Report--

French automaker Renault Group announced on November 8 that Geely Holdings, Geely Motor (hereinafter collectively referred to as Geely) and Renaults.a.s. Sign a non-binding framework agreement proposing the establishment of a joint venture company in which Geely and Renault will each own 50 per cent of the new company. The new joint venture company will become an independent global provider of powertrain solutions, produce next-generation hybrid systems and develop low-carbon and low-emission technologies through five global R & D centers, the announcement said. At the time of launch, the new company is expected to provide products to Renault and Geely brands, including Renault, Dacia, Geely, Volvo, Lecker, Proton, as well as Nissan and Mitsubishi. In the future, the new company can also provide powertrain technology to third-party brands.

Renault is about to spin off the electric and fuel vehicle business, which will be named Horse and will be headquartered outside France. It is reported that without new investors, Renault will strike a 50:50 equity deal with Geely. In addition, the electric vehicle business, which will be named Ampere and headquartered in France, will be valued at about 10 billion euros (71.578 billion yuan), and IPO is scheduled to go public in the second half of 2023.

News that Geely and Renault are about to jointly take a stake in the fuel car business began circulating in August. According to Reuters on Aug. 30, Renault plans to spin off its internal combustion engine business from its electric vehicle business. Geely and an oil group are in talks to buy a stake in the internal combustion engine business, but for now, the oil group does not seem to have the intention to cooperate.

Why did Renault choose Geely? In March 2010, Geely Holdings and Ford officially signed an agreement in Gothenburg, Sweden, to formally acquire a 100% stake in Volvo for $1.8 billion, and Volvo became a Geely holding brand. In June 2017, Geely Holdings signed a final agreement with Malaysia's DRB-HICOM Group to acquire 49.9 per cent of DRB-HICOM 's PROTON and 51 per cent of luxury sports car brand Lotus. In August 2017, Geely holding Group and Geely Automobile Group signed a joint venture agreement with Volvo Motor, Lectra Motor became a three-way joint venture brand, and the joint venture company was formally established. In February 2018, Geely Holdings acquired about 9.69% of Daimler for a huge amount of US $9 billion through its overseas enterprises, making it the largest single shareholder in Daimler Group. In March 2019, Geely Holdings and Daimler announced that they would set up a joint venture to jointly operate and promote the transformation of the smart brand around the world. The joint venture is headquartered in China and each has a 50% stake. After 2020, Geely successively participated in the restructuring of Lifan, Cheetah, and even acquired mobile phone maker Meizu. A series of acquisitions, especially the revival of Volvo, which is on the verge of delisting, has made Geely's reputation and technology bumper, while Renault, which has not had a good time in the Chinese market, may be interested in Geely's unlimited potential in cross-border operations.

So why did Geely choose Renault and the fuel car business that has been downgraded by the market? As a century-old automobile brand, Renault's technical strength should not be underestimated. Universal joint straight transmission, turbocharged engine, removable spark plug, detachable wheel, child safety lock and so on all come from Renault's inventions. Its fuel vehicle sales are deep-rooted in the European market, and there are still many things to learn from the related technology. Although Renault has suffered repeated setbacks in the Chinese market, the European market and Latin American market have a strong sense of existence. With the deepening of cooperation with Renault, Geely can further shorten the cycle of opening up overseas markets. At the same time, it can also further strengthen Geely's research and development capabilities in internal combustion engine technology, enabling hybrid systems such as Raytheon. Although new energy vehicles are the trend of the times, it does not mean that the era of fuel vehicles is over. At present, new energy vehicles still have many disadvantages, so it is very unlikely that fuel vehicles will be replaced in a short time.

Generally speaking, the cooperation between Renault and Geely is another rebirth of Renault to the Chinese market, while for Geely, fuel vehicle technology is still the center of development in the future, and cooperation with Renault is a solid step on the road of globalization and new energy. but the cooperation between hybrid models and fuel vehicles will not be the end point of Geely Renault, long-term win-win is the real goal of both sides.

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