Renault to exit JV with China’s Dongfeng Motor amid slowing market
TOKYO, NNA - China’s Dongfeng Motor Group Co. and French automaker Renault SA have agreed to restructure their 50-50 joint venture, Dongfeng Renault Automobile Co., given China’s slowing auto market and the business performance at their subsidiary, Dongfeng Motor said on Tuesday.
Under the non-binding memorandum signed by the two companies, Renault will transfer its whole stake in the joint venture for an undisclosed value to Dongfeng Motor Group, which is headquartered in Wuhan.
Dongfeng Renault Automobile will stop business activities related to the Renault brand.
The joint venture, set up in 2013, has had tough years with its new car sales falling 62.9% from a year earlier to 18,607 units in 2019 and its pre-tax profit turning to a loss. For the January-March period this year, the company’s cumulative sales fell 88.7% year-on-year to 663 units.
Dongfeng Motor Group and Renault will continue to cooperate with Nissan Motor Co. on new-generation engines. They also plan to collaborate on business related to connected vehicles as Nissan shifts its focus to electrified, connected, and self-driving vehicles.