French automaker Renault is ditching its main passenger car business in China following poor sales at the loss-making venture with Dongfeng Motor Group. All “Renault brand-related activities” will be halted across China, although electric Renault cars and light commercial vehicles will continue to be sold under existing joint ventures with Brilliance Jinbei Automotive Company, eGT, and the Jiangxi Jiangling group. Renault unveiled today its new strategy for the Chinese market, building on two of its key pillars: Electric Vehicles (EV) and Light Commercial Vehicles (LCV). Within this new strategy, Groupe Renault activities in China will be driven as follows:
About Chinese ICE Passenger Car Market
Regarding ICE passenger car, Groupe Renault has entered into a preliminary agreement with Dongfeng Motor Corporation under which Renault transfers its shares to Dongfeng. DRAC will stop its Renault brand-related activities. Renault will continue to provide high-quality aftersales service for its 300,000 customers through Renault dealers but also through Alliance synergies. Further development for Renault brand passenger cars will be detailed later within future new mid-term-plan Renault. Furthermore, Renault and Dongfeng will continue to cooperate with Nissan on new-generation engines like components supply to DRAC and diesel license to Dongfeng Automobile Co., Ltd. Renault, and Dongfeng will also engage in innovative cooperation in the field of intelligent connected vehicles.
About Chinese LCV Market
Increasing urbanization rate, e-commerce extension, inner-city transportation schemes, and versatile customer usages are the key characteristics of a rapidly changing LCV market in China. It reached 3.3 million in 2019 and is forecasted to maintain a steady upwards path. Renault Brilliance Jinbei Automotive Co., Ltd. (RBJAC), launched in December 2017, is Groupe Renault’s sword arm for its LCV business in China. Groupe Renault is leading the LCV market in Europe in terms of sales volumes for light commercial vehicles, as well as sales of electric light commercial vehicles. Jinbei is a well-established Brand with 1.5 million customers in China and closes to 162,000 sales in 2019. With Renault’s expertise and technologies, RBJAC is modernizing Jinbei models and extending the line-up with a total of 5 core models by 2023. The joint venture will also export in the future.
This new China strategy will enhance Renault’s competitive advantages to sustain a long-term presence in the Chinese market and maximize synergies with Nissan under the new Alliance concept of “leader-follower”.