AutoBeta(AutoBeta.net)07/11 Report--

On July 11, Geely Holding Group and Renault Group jointly issued an announcement that Geely and Renault signed a joint venture agreement, each holding 50% of the joint venture company. The new company is committed to becoming the leader of the next generation of efficient and energy-saving hybrid powertrain solutions, developing, manufacturing and supplying advanced hybrid powertrain and efficient fuel powertrain worldwide.

The announcement said the new company will be jointly led by Geely and Renault, with half of the board members working together to develop and implement the company's development strategy. In the initial phase of operation, the new company will ensure business continuity through two operation centers, one in Madrid and the other in Hangzhou Bay. In addition, the new company headquarters will be located in the UK, and a management team will be set up to integrate operations, seek synergies and determine future development plans.

At the same time, Geely and Renault will transfer relevant intellectual property rights to their respective operation centers, allowing the new company to fully develop future powertrain technologies, and the new company's products can cover 80% of the global fuel and hybrid vehicle market application needs. The new company will serve several brands, including Renault, Geely, Volvo, Proton, Nissan, Mitsubishi and PUNCH Torino Powertrain. It is understood that Geely and Renault will engage in long-term procurement cooperation with the new company, purchasing products including passenger car engines and transmissions, including fuel power and hybrid power, while the new company will provide hybrid battery development business for Renault light commercial vehicles. In the future, the new company will have five R & D centers and 17 factories in Europe, Asia and South America, providing a full range of powertrain solutions for more third-party automotive brands.

Subject to approval from relevant antitrust and foreign direct investment authorities and conditions permitting, the transaction is expected to close in the second half of 2023.

Earlier, Renault spun off its electric vehicle and fuel vehicle businesses, with the fuel vehicle business named Horse and headquartered outside France and the electric vehicle business named Ampere headquartered in France.

In November 2022, Geely Holding Group announced that it had signed a non-binding framework agreement with Geely Automobile and Renault Group to establish a brand-new company to develop, manufacture and supply advanced hybrid powertrain and efficient fuel powertrain on a global scale. According to the plan, the new company has an annual production capacity of 5 million units, including fuel engines, hybrid engines, plug-in hybrid engines and transmissions, which will supply more than 130 countries and regions. In March, Saudi Aramco proposed to acquire a minority stake in the joint venture in the form of a cash investment.

Geely and Renault joint venture, the purpose is nothing more than fuel car technology and hybrid technology. As a century-old automobile brand, Renault's technical strength should not be underestimated. Universal joint direct transmission, turbocharged engine, extractable spark plug, detachable wheel, child safety lock, etc. all come from Renault's invention. Its fuel vehicle sales are deeply rooted in the European market, and there are still many things worth learning from Geely.

Although Renault has been repeatedly frustrated in the Chinese market, the presence of European market and Latin American market is very strong. With the deepening of cooperation with Renault, Geely can further shorten the cycle of exploring overseas market, and at the same time, it can further strengthen Geely's R & D capability in internal combustion engine technology, enabling hybrid systems such as Lei Shen. Although new energy vehicles are the trend of the times, it does not mean that the era of fuel vehicles has ended. At present, new energy vehicles still have many disadvantages, so the possibility of fuel vehicles being replaced in the short term is extremely small.

Overall, Renault's partnership with Geely is another breakthrough for Renault in the Chinese market. In fact, for Geely, what is lacking is not traditional technology, but electric technology. As the head car enterprise of Chinese brand, Geely's motorization has lagged far behind the leading level of the industry.

Data show that Geely's cumulative sales volume in the first half of the year was 694,045 vehicles, up 13% year-on-year. Among them, 85,817 pure electric vehicles (including battery replacement), an increase of 58% year-on-year; 23,891 plug-in hybrid vehicles, down 7% year-on-year; compared with BYD, Tesla, GAC Ai 'an and other head new energy vehicles, Geely new energy vehicles have fallen behind. BYD, for example, sold more than 250,000 vehicles in June, twice as many as in the first half of the year.

Renault is determined to form an internal combustion engine joint venture with Geely, partly in the hope of accelerating the development of electric vehicles. According to the plan, Renault will sell 100% electric vehicles in Europe by 2030, fully transforming into an electric vehicle brand. On the other hand, Renault continues to lose China, announcing the sale of Dongfeng Renault shares in 2020, and the bankruptcy reorganization of Brilliance Renault in 2022, showing Renault's acclimatization in the Chinese market to some extent, for reasons other than French culture, automobile products and technology not adapting to the Chinese market.

Of course, although Renault has repeatedly stressed that it has not withdrawn from the Chinese market, Renault is now delisted in the Chinese market, and it is unknown whether cooperation with Geely is the first step to return to the passenger car market.

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