Renault-Dongfeng joint venture gets green light

Updated: 2013-12-06 15:02

By MENG JING (chinadaily.com.cn)

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French vehicle manufacturer Renault SA has received the green light from the government to jointly produce cars with Dongfeng Motor Group.

The approval of the proposed $1.3 billion venture from the National Development and Reform Commission gives Renault a foothold in China, the world's largest auto market by units sold.

In a statement to the Hong Kong Stock Exchange, Dongfeng, China's second-largest carmaker, said the joint venture would produce 150,000 vehicles a year. Dongfeng said its aim is to build a "globally competitive" 50-50 joint venture, which is expected to get a license to export Renault cars.

Dongfeng and Renault will inject a total of 7.8 billion yuan ($1.3 billion) in Sanjiang Renault, a dormant company, which Renault established in 1993 with China Sanjiang Space Industry Group.

However, the manufacturing plan never took off, which makes Renault one of the very few multinational vehicle manufacturers that don't make cars in China.

China's auto market has doubled over the past five years.

Auto sales in China topped 19 million vehicles last year.

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