Renault partners with Geely to return to the Chinese market

Geely, the manufacturer that sells the most electric cars in China, already signed a similar agreement with Daimler in 2019 to make the Smart brand electric cars from 2022. Although the two arrangements have nothing to do with each other, they confirm the Chinese carmaker's strategy of creating partnerships to develop electric cars by sharing technologies and saving costs.

This agreement will mean Renault's return to China after it ended in 2020 upon the termination of its contract with Dongfeng Motor Group. It should be remembered that foreign car brands can only operate in the largest market in the world if they partner with local firms. Only Tesla is exempt from the measure after a compromise with the Chinese government led by President Xi Jinping.

This news somehow contrasts with the plans of the Renault-Nissan-Mitsubishi Alliance for the future, which sought a distribution of technologies and segments by continents and brands, which they called the "leader-follower" model. As a result of this plan, Renault had to lead Europe, Russia, South America and North Africa, while Nissan was left with North America, China and Japan. However, Nissan has yet to comment on the deal that would put Renault back on the Chinese game board. Autonews cite internal sources that assure that they discuss this move with Renault and the possible benefits of this strategic partnership.

For Renault, the benefits are clear: to return to the most important market in the world, lower costs of development and production of hybrid cars, and boost its factory in Busan, which was closed due to a low production rate. The new global strategy of the Alliance served, according to its brands, to bury the "Ghosn" scandal, which exploded when Carlos Ghosn, former president of the Alliance and its brands, was arrested and imprisoned for a time for various financial crimes. However, the Renault Group is strengthening itself thanks to the reformulation of its group strategy, presented at the beginning of the year by Luca de Meo, president of the same since 2020, and now presenting this agreement. In 2019, Renault was on the verge of merging with the PSA Group, a move that was finally dropped and ended with PSA joining the FCA Group forming Stellantis manufacturing corporation. A few messages of solidarity have been published from the three brands of the Alliance.