There has been a lot of talk recently about the intention of China’s Dongfeng Motor to take a stake in PSA Peugeot-Citroen. Until that deal is official, the Asian carmaker has announced a new joint venture with Renault, France’s other major automaker.
Renault and Dongfeng Motor will invest €870 million ($1.2 billion) to build cars in a new plant in Wuhan, China. The facility will have an initial production capacity of 150,000 vehicles annually, with the potential for a double output in the near future. The first vehicles from their joint-venture will roll off the assembly line in 2016.
Located in the capital of the Hubei province, the plant will cover a total area of 95 hectares and will lead to the creation of 2,000 new direct jobs. Called Dongfeng Renault Automotive Company (DRAC), the new 50/50 joint venture company has been granted final approval by the National Development and Reform Commission of China (NDRC) on December 2.
At first, the plant will manufacture crossover vehicles under the Renault brand, but plans also include a range of products under a local brand at a later stage. Renault has been present on the Chinese market with imported cars such as Koleos and Fluence. This year, Renault expects sales to exceed 30,000 in China, especially thanks to the success of Koleos. Renault is also developing its dealer network, which will grow from 92 outlets in 2013 to 120 by 2016.
By Dan Mihalascu
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