ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Automobiles

Geely recharges Renault's Chinese ambitions with hybrid tie-up

Joint venture to build cars under French company's brand in world's largest market

A Renault hybrid vehicle: The French automaker is eyeing a slice of what stands to be an enormous market for low- and zero-emissions cars.   © Reuters

BEIJING -- Volvo Car owner Geely will team up with the Renault group on hybrid vehicles in China and South Korea, in the latest European alliance for the largest private-sector Chinese automaker in the world's biggest auto market.

Zhejiang Geely Holding Group is expected to take a majority stake in a new joint venture under a memorandum of understanding announced Monday.

For Renault, the deal marks a renewed push into China. Geely is expected to provide hybrid technology for production at its own group factories, allowing its French partner to focus on brand strategy and sales.

Renault said in 2020 that it would end a passenger car joint venture with state-owned Dongfeng Motor. It has focused on commercial vehicles and electric vehicles in China.

The terms of the Geely venture were not disclosed. Geely-made Renault cars could hit the market in two to three years, but no specific timeline was announced.

To accelerate development of Renault-branded vehicles, Geely may draw on the connected-car brand Lynk & Co. it has co-developed with Swedish unit Volvo Car.

Renault, part of an automaking alliance with Japan's Nissan Motor and Mitsubishi Motors, is eyeing a slice of what stands to be an enormous market for low- and zero-emissions cars. By 2035, China's government envisions hybrids constituting half the market for passenger cars, with the rest coming from electrics and other so-called new-energy vehicles.

In South Korea, Geely and Renault have begun research, with tentative plans to use a Lynk & Co. platform to create passenger cars tailored to local buyers. The Geely tie-up could help curb development costs for struggling group member Renault Samsung Motors.

Geely is a key player in China's strategy of becoming a global automobile powerhouse, with Chairman Li Shufu said to enjoy a strong relationship with Chinese President Xi Jinping.

Geely acquired Volvo Car from Ford Motor in 2010. After Li became a large shareholder in Germany's Daimler, Geely turned Daimler's Smart luxury minicar brand into a 50-50 venture.

Geely is also working with Baidu join the country's heated electric-car race, readying to handle production for the Chinese technology group. The alliance with Renault creates further potential to scale up Geely's operations.

Monday's announcement on the new memorandum of understanding says the focus will be on "fast-growing Asian markets," fueling speculation that the partners will look to Southeast Asia next.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more