Carlos Ghosn, Chairman and Chief Executive Officer of Renault, and Xu Ping, Chairman of Dongfeng Motor, have signed a contract for the creation of a new joint venture company for localized production in China to be called Dongfeng Renault Automotive Company (DRAC). The final approval by the National Development and Reform Commission of China (NDRC) was granted on 2 December 2013.
This interested me since I actually own a Dong Feng! A Dong Feng Mini Truck with the large 1.1 liter engine! Now I did not buy this vehicle to use as a daily driver, but it does transport all the gear, fuel, spare wheels, tools, etc., for the race car, which is quite a load, and the 1.1 liters seems totally adequate. Now I don’t think I’d like to drive it to Bangkok, but for round Pattaya, it is excellent.
The Mighty Dong Feng.
Back to Renault getting into bed with my Dong Feng. The Dongfeng-Renault joint venture will start producing vehicles in 2016. The new plant will have an initial production capacity of 150,000 vehicles per year, with the potential for double that in the near future.
DRAC’s product plan will begin with a new range of crossover vehicles under the Renault brand. At a later stage, the new joint venture will introduce a range of products under a local brand. Sales of locally produced vehicles will start in 2016.
The Renault brand is already in the Chinese market with the imported cars such as Koleos and Fluence. With the Chinese new car market being now the world’s largest, this JV provides a significant new growth opportunity for Renault.
DFG chairman Xu Ping said, “The launching of the Dongfeng Renault project symbolizes the start of a comprehensive cooperation between DFG and the Renault-Nissan Alliance. The project is a creative endeavor and practice in business model under economical globalization trends. It is a vital milestone for DFG’s self-dependent development in opening process. We expect Dongfeng Renault will bring fascinating products and customer satisfactions for the China auto market. We expect the success of Dongfeng Renault.”
Carlos Ghosn, Chairman and CEO of Renault agreed, saying, “Dongfeng and Renault, as parent companies of DRAC, have been closely working together to ensure the future success of DRAC. Our partnership agreement is part of a long term strategy. The challenge is big and we are ready for it.”
What with Nissan and now Dong Feng, Carlos Ghosn seems ready for any suggestions. Perhaps he might like to take over General Motors Holden in Australia?
