France’s Renault SA said on Monday it is looking to revive business in China by forming a hybrid vehicle joint venture with Geely Holding Group.
The two companies have signed a framework agreement to set up the joint venture, which would make and sell Renault-branded petrol-electric hybrid cars in China using Geely’s technologies, supply chains and manufacturing facilities while Renault would focus on sales and marketing.
As part of the partnership, the two automakers also agreed to explore a joint localisation of Geely’s Lynk & Co-brand hybrid vehicles in South Korea where Renault has been manufacturing and selling cars for more than two decades.
The venture would focus on China and South Korea initially but would likely to be expanded to cover fast-growing Asian markets.
Geely and Renault are also looking at developing full electric battery cars for the venture, one source familiar with the matter said.
The new venture is modeled on an EV-focused venture Geely set up in 2019 with Daimler, which plans to manufacture in China and sell Smart-brand EVs based on Geely technology using Daimler’s global sales network.
The Geely-Renault venture, however, would be completely separate from Geely’s venture with Daimler.
For Geely, China’s biggest local automaker by sales, the newest new joint venture would strengthen its strategy to use partnerships with other automakers to share technologies, supply chains and manufacturing, which reduces development costs of EV and other future mobility technology.
For Renault, the partnership would help the French automaker rebuild its presence in China after it ended a joint venture with Dongfeng Motor Group in 2020.