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As part of the Renaulution plan, Renault and the Geely group have signed a collaboration agreement for the production, in South Korea, of thermal and hybrid vehicles. Nissan is currently out of the game.
In addition to Renaults, the South Korean plant of Renault Samsung Motors will produce vehicles from Chinese Geely. © The Digital
“Failure is the foundation of success.” Luca de Meo, the CEO of the Renault group, would he be a follower of the wise Lao Tseu?
With 19,229 vehicles sold (PDM of 0.8%) in China in 2021, it cannot be said that the Chinese market has succeeded Renault. Moreover, as of April 2020, the French manufacturer ended its joint venture with the Chinese Dongfeng. Note that Nissan, a member of the Renault-Nissan-Mitsubishi alliance and which also has a joint venture with Dongfeng, saw its sales on the Chinese market drop by 5.2% with 1,381,494 vehicles sold.
In response to these results, Renault quickly pulled itself together by announcing a partnership agreement in August 2021 with the Chinese group Geely, owner of Volvo Cars, Polestar and Lynk & Co, among others. Thus, Geely would help Renault sell hybrid vehicles in China, while the French manufacturer would allow Lynk & Co, a subsidiary of Geely, to penetrate the South Korean market.
Renault Samsung Motors’ South Korean plant in Busan. ©Renault
We now know a little more. From 2024, the two entities will produce thermal and hybrid vehicles in the Renault Samsung Motors (RSM) plant located in Busan (South Korea) in which Renault owns 80% of the shares. The vehicles produced will initially be reserved for the South Korean market before going on to export.
Future vehicles will be based on “Geely Group’s Compact Modular Architecture (CMA) by its R&D center located in Sweden” and will also use hybrid engines from Geely. As for Renault and its subsidiary, their contribution is limited to “their expertise in design and customer experience, while bringing innovative technologies […]”.
According to the press release provided by Renault, “this collaboration — which is part of the Renaulution plan — marks a step forward for the two automotive groups to produce low-emission vehicles, but also to increase their penetration in the Asian electric hybrid markets”.
Lynk & Co vehicles will be produced at Renault Samsung Motors’ South Korean plant. © Geely
Nissan, excluded from the discussions
All the same, there remains a crucial question: how will the Japanese at Nissan react on January 27 at the meeting scheduled with Renault and Mitsubishi? According to the website Business Times, Nissan would not have really appreciated not being involved in the discussions between Renault and Geely. This same source claims that the two companies “used to cooperate in areas such as research and human resources” but that “collaboration and communication had diminished”.
Any divorce seems excluded however for the moment. Indeed, on January 20, Makoto Uchida, the CEO of Nissan, declared on the economic information site Bloomberg than “the alliance will always have a strategic partnership together. We already have 21 years of successful collaboration and synergies. This mindset will continue, and this momentum needs to be strengthened.”
As a reminder, in May 2020, the Renault-Nissan-Mitsubishi alliance unveiled the “leader-follower” scheme to enhance the efficiency and competitiveness of vehicles and technologies”. Concretely, “each member will become a referent in the regions where he has the best strategic assets and will act there as a facilitator and support for the competitiveness of others”. Thus, Renault would be the referent for Europe, Russia, South America and North Africa, Nissan for China, North America and Japan and Mitsubishi for Asia and Oceania.