EXCLUSIVE Geely and Renault to announce hybrid-focused automotive JV for Asia soon – sources

BEIJING, Dec.21 (Reuters) – Geely Holding and France’s Renault are expected to announce an agreement soon to jointly produce the Chinese automaker’s hybrid vehicles in South Korea and consider possibly exporting tax-free cars to the United States, three say. people familiar with the said material.

The joint venture agreement (JV), in preparation since the beginning of this year and which also involves joint operations in China, will allow Renault (RENA.PA) to strengthen its ailing activity in South Korea and more broadly. its presence in Asia.

Renault, which left China last year, will re-enter the world’s largest auto market by forming a new brand focused on plug-in hybrids to be jointly managed by it and Geely (GEELY.UL), the sources said.

Geely is expected to work with Renault to offer a new range of green cars that use Geely’s so-called Compact Modular Architecture (CMA), a mid-size vehicle underbody structure shared by Geely and Volvo (VOLVb.ST), as well as its chains procurement and manufacturing facilities in China, the sources added.

Renault will focus on the design, sales and marketing of its newly-defined brand vehicles in China, the sources said.

For Geely, the deal could mean a production facility in South Korea and access to Renault’s assembly plant in the country, where Renault has been manufacturing and selling cars for more than two decades via a brand. local with a unit of the Samsung group.

One model Geely plans to produce at Renault’s plant in the southeastern port city of Busan in South Korea is the Lynk & Co 01 sport utility vehicle, one of the sources said.

The Lynk & Co 01 model is currently available in three powertrain options, gasoline, conventional gasoline-electric hybrid and plug-in electric hybrid.

It was not immediately clear which one he planned to produce in Busan, but one of the three sources said the gasoline and hybrid models would be produced in South Korea.

The aim is to locate production of certain Lynk hybrid vehicles in South Korea, the sources said, implying that the companies would align local parts sourcing.

Geely could potentially gain “back door entry” into the US market as a result of the deal, one of the sources said.

The Chinese automaker is considering the possibility of taking advantage of South Korea’s free trade agreement with the United States and exporting its Lynk & Co vehicles to the world’s second-largest auto market, two of the sources said.

It comes at a time when Chinese automakers such as Chery Automobile (CHERY.UL) have put their plans to penetrate the United States aside given the COVID-19 pandemic and China-U.S. Tensions.

RENAULT SAMSUNG VERSIONS OF LYNK CARS

In South Korea, Renault will try to strengthen its business by making Renault Samsung versions of certain Lynk & Co cars at its Busan plant, the three sources said.

Renault Samsung Motors, which Renault controls 80%, has experienced difficulties in recent years. Sales, including exports, almost halved from 2017 to 116,000 vehicles last year. Sales through November of this year totaled 120,000 cars.

In China, Renault and its global alliance partner Nissan Motor Co had the same partner Dongfeng (0489.HK), before the Renault-Dongfeng JV dissolved last year.

Renault and Nissan also have a long history of designing, manufacturing and marketing cars that share platforms and other vehicle components to reduce manufacturing and other costs.

The impact of Renault’s partnership with Geely on the Renault-Nissan alliance was not immediately clear.

Reporting by Norihiko Shirouzu in Beijing, additional reporting by Joyce Lee and Heekyong Yang in Seoul; Editing by Himani Sarkar

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