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Renault Group has just signed a contract with Chinese auto giant Dongfeng Motor to start a new joint venture company, Dongfeng Renault Automotive Company (DRAC), for a localized production of Renault vehicles there. It also becomes the sixth manufacturer to have a join-venture with Dongfeng after Peugeot, Citroen, Honda, Kia and Nissan.

“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 China auto market. We expect the success of Dongfeng Renault.” said Dongfeng Motor Chairman Xu Ping.

“Dongfeng and Renault, as parent companies of DRAC, have been closely working together to ensure the future sucess of DRAC. Our partnership agreement is part of a long term strategy. The challenge is big and we are ready for it.” said Renault Group Chairman and Chief Executive Officer Carlos Ghosn, who signed the contract with Dongfeng Chairman Xu Ping which was approved by the the National Development and Reform Commission of China (NDRC) earlier on 2nd December, 2013.

The 7.76 billion renminbi total investment for the 50/50 joint venture, plans to establish a new manufacturing plant on a 95 hectares area in the capital of the Hubei province, Wuhan, for an initial production capacity of 150,000 vehicles per year by 2016. This is said to create 2,000 new jobs. The Group is also planning to develope its network from 92 dealers in 2013 to 120 dealers by 2016.

 



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