Renault shifts to all-electric cars for China

French automaker Renault said Tuesday that it would start building only electric vehicles for China's huge passenger car market, dropping conventional internal combustion engines as well as its joint venture with local manufacturer Dongfeng.

The strategy shift comes after years of sluggish sales in China, where Renault hoped its 50-50 venture with Dongfeng, announced in 2013 and focused on a factory in Wuhan, would allow it to make inroads quickly.

But the coronavirus outbreak in Wuhan forced the factory to shutter, just as Renault was wrestling with slowing growth worldwide and a cashflow squeeze that has prompted ratings agencies to cut its credit ratings to "junk" status.

"We are opening a new chapter in China. We will concentrate on electric vehicles and light commercial vehicles, the two main drivers for future clean mobility," Renault chairman for China operations, Francois Provost, said in a statement.

The automaker will transfer its stake in the DRAC venture to Dongfeng, which will stop marketing the Renault brand. No financial details of the transaction were disclosed.

To bolster its all-electric push, Renault said it will "reinforce" its eGT venture, also formed with Dongfeng as well as Renault's Japanese alliance partner Nissan, to further development of its City K-ZE model, a low-cost crossover vehicle that Renault plans to launch in Europe next year.

Renault said its other Chinese venture, Jiangxi Jiangling Group Electric Vehicle Co., aimed to have four core models for the Chinese market by 2022.

It said 860,000 electric vehicles were sold in China last year, making it the largest market in the world -- though they were still just a small fraction of the 25 million vehicles of all types bought.

Renault sold just 180,000 cars, both traditional and electric, in China in 2019, down from 217,000 the previous year, and representing less than one percent of the overall market.

It said electric vehicles are forecast to account for 25 percent of the Chinese market by the end of this decade.

Renault chairman Jean-Dominique Senard said this month that he hoped to get up to five billion euros ($5.5 billion) in loans guaranteed by the French state to help the automaker weather the coronavirus crisis, which has seen sales nearly grind to a halt in affected markets.

dga/js/mlr/bmm

Renault

Dongfeng Motor Corporation

NISSAN MOTOR

Related Links
Car Technology at SpaceMart.com

Tweet

Thanks for being there;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.

SpaceDaily Monthly Supporter
$5+ Billed Monthly

paypal only

SpaceDaily Contributor
$5 Billed Once

credit card or paypal

VW loses 'damning' dieselgate class lawsuit in UK
London (AFP) April 6, 2020
Volkswagen faces the threat of a hefty "dieselgate" payout in Britain after a court Monday ruled in favour of more than 90,000 drivers whose vehicles cheated emissions tests. Following adverse rulings and compensation payouts elsewhere, the High Court in London ruled that the German auto giant was liable in Britain, too. The ruling adds pressure on Volkswagen just after the carmaker said last month it was preparing to shutter most of its European plants, joining a slew of other carmakers as the ... read more