Renault Automobile's Switch to India in China
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On the 10th, Renault Motors of France signed a memorandum of understanding with Mahindra, a famous automobile manufacturer in India. Renault announced that it will invest billions of dollars in India to build a complete vehicle manufacturing plant and engine plant with an initial production capacity of 300,000 units. Product is
Renault Dacia Logan sedan.
Renault suddenly made a huge investment in building an auto factory in India, or it meant that the Renault auto China project that was signed three years ago has completely stopped.
Going to India
Renault said that it will establish a long-term strategic partnership in India. According to the memorandum, the two parties plan to establish a green assembly plant and a Renault power system plant in India. Currently, a joint venture company is used as a platform to promote the Dacia Logan sedan in India in the first half of 2007. Subsequently, Renault Automobile and Mahindra were introduced into different products.
Renault told China Business News that the new plant will be managed jointly by both parties and that the long-term planned production capacity will reach 500,000 within five years. In addition, starting in mid-2009, the new plant will also produce Mahindra and Mahindra and Renault’s joint venture company’s series of vehicles designed for the Indian market. The initial annual production will be 300,000.
In addition to Renault, Nissan Motor Co., Ltd. in the Renault-Nissan Alliance also stated that it intends to join the Renault India project. Nissan announced on the 10th that it had terminated negotiations with Suzuki to introduce Nissan models in India through Suzuki’s Maruti Udyog and said it is currently in talks with Renault and Mahindra to see if they would join their joint venture.
In addition, Renault said that the huge development prospects of the Indian automobile market and the radiation power to the Southeast Asian automobile market are also the reasons that prompted Renault to ultimately choose India as an important production base in the Asia Pacific region.
Abandon the Chinese project?
“The Renault project southwards to India means that the Dongfeng Renault sedan project that began to stall in the middle of last year has not been possible to restart within a few years.†Yesterday, a Dongfeng Motor person involved in the Dongfeng Renault project told reporters, “Because the two parties are at the production site and The final agreement cannot be reached on related projects."
In June 2004, during the visit to Beijing by Renault's former president Louis Shi Weize, he and the relevant government departments and the Dongfeng Motor leadership team discussed the project of Renault and Dongfeng to build joint ventures. According to the plan at the time, Dongfeng Renault will start production in 2006. The goal is to develop in two phases and eventually reach an annual output of 300,000 vehicles. Dongfeng Renault’s first launch product is the Renault Ace model medium-sized car Megane.
The Dongfeng Renault Automobile Project started in mid-2004 and was suddenly suspended in the middle of last year.
Dongfeng insiders told reporters that the reasons for the suspension of the Dongfeng Renault project are many, but the recent poor sales of Renault vehicles in China and the upgrading of home-made site selection games are the main reasons leading to difficult projects. In an interview with reporters, Renault’s new CEO Carlos Ghosn stated that the location of Renault’s project will give priority to places that are closer to the supporting market, but Chinese authorities prefer Reynolds to set up an auto assembly plant in provinces with higher unemployment rates. Reebok's Asia Pacific President Dai Bole also reluctantly said last year: “The location of the Renault project is not determined by Renault itself.â€
However, does Renault's selection of India mean that the long-standing Renault project of Dongfeng is finally stranded?
Yesterday, Renault did not confirm to reporters the news of the suspension of the Dongfeng Renault project.
View related topics: Dongfeng Renault project tracking report