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Recently, Renault Group and Jiangling Motor announced the establishment of a joint venture, Renault increased its capital by 1 billion yuan to become a shareholder of Jiangling Automobile Group New Energy Automobile Co., Ltd., with a 50% stake.

Fu Lan, vice president of Renault Group and chairman of China, and Qiu Tiangao, chairman of Jiangling Automobile Group Co., Ltd., said that this cooperation is a major part of the two sides' layout of new energy strategies, which can promote each other's development in the field of new energy vehicles and enhance their position in the domestic new energy vehicle market.

But in fact, the current development of Renault and Jiangling in the domestic market is not smooth, sales have dropped sharply, the industry has some doubts about the combination of Renault and Jiangling, questioning whether there is really a way out.

Renault and Jiangling mentioned in the announcement that the cooperation is in line with the layout of both sides, and through this new project, Renault Group will further expand its influence in China's new energy vehicle market and promote the development of China's new energy vehicle industry. Jiangling also hopes to integrate resources through this cooperation, which is conducive to the rapid development of the company.

On December 20, 2018, Renault and Jiangling announced that they had reached a cooperation agreement to further expand China's electric vehicle market. At that time, the two sides made it clear that Renault would become an important shareholder in Jiangling Group's new energy vehicles by way of capital increase, and said it would report to the relevant departments for review as soon as possible, and the deal is expected to be completed in 2019.

It took only seven months from the announcement to the establishment of the joint venture, and in terms of time, both sides are eager to promote the establishment of the joint venture. The industry believes that this is related to the demands of both sides. Renault is eager to gain a foothold in China's new energy market, while Jiangling hopes to develop in the new energy vehicle market.

But Renault's development in China is not smooth. Since 2018, Renault's sales in China have declined here. Renault's total sales of passenger and commercial vehicles in China in the first half of this year were only 89700, down 23.7% from the same period last year. Dongfeng Renault, its joint venture, sold only 8901 vehicles in the first half of this year, down 759000 from the same period last year.

In the face of declining sales, Renault is pinning its hopes on new energy vehicles. In 2017, Renault set up a new energy joint venture with Oriental Motor and Nissan, easyit New Energy, and the first pure electric car is scheduled to go into production this year, but Renault's deployment of new energy in China is relatively slow compared with other foreign car companies.

Renault's cooperation with Jiangling also took a fancy to Jiangling's dual qualifications, factory and channel construction. As early as the end of 2016, Jiangling Motor obtained the dual qualification for the production of pure electric passenger cars, built a factory with an annual production capacity of 50,000 vehicles, and improved the laying of channels, which seemed tailor-made for Renault, which wanted to accelerate the development of new energy.

For Jiangling, the industry believes that this cooperation is due to the weak growth of Jiangling new energy. according to the relevant data, by the end of 2018, Jiangling new energy has always maintained growth, but the increase has gradually decreased, and even showed a downward trend in the first half of this year.

In addition, at present, Jiangling New Energy's products are mainly A00-class minicars and A0-class small cars, and the mileage is only 300km, but also due to problems can not be pure electricity in the area north of the Yellow River. From the market point of view, their own cars do not have an advantage.

Although Cui Dongshu, secretary general of the passenger car Market Information Association, also believes that this cooperation has many benefits for both sides and is conducive to a win-win situation, the industry is more worried about whether the "weak and weak alliance" of the two sides can break out of the bottleneck and have their own place in the new energy market. Everything is full of unknown.

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