Renault rejigs China strategy, will focus only on LCVs and EVs

by Autocar Pro News Desk , 14 Apr 2020

Groupe Renault unveiled today its new strategy for the Chinese market, building on two of its key pillars: Electric Vehicles (EV) and Light Commercial Vehicles (LCV).  Within this new strategy, its activities in China will be driven as follows:

IC Passenger Vehicles: Renault has entered into a preliminary agreement with Dongfeng Motor Corporation under which Renault transfers its shares to Dongfeng. DRAC will stop its Renault brand-related activities. Renault will continue to provide aftersales service for its 300,000 customers through Renault dealers but also through Alliance synergies. Further development for Renault brand passenger cars will be detailed later within future new mid-term-plan Renault.

Furthermore, Renault and Dongfeng will continue to cooperate with Nissan on new-generation engines like components supply to DRAC and diesel license to Dongfeng Automobile Co., Ltd. Renault and Dongfeng will also engage in innovative cooperation in the field of intelligent connected vehicles.

LCV market: Increasing urbanisation, e-commerce extension, inner-city transportation schemes and versatile customers usages are the key characteristics of a rapidly changing LCV market in China. It reached 3.3 million units in 2019 and is forecasted to maintain a steady upwards path.

Renault says Renault Brilliance Jinbei Automotive Co., Ltd. (RBJAC), launched in December 2017, is the growth driver for its LCV business in China.

Groupe Renault says it is leading the LCV market in Europe in terms of sales volumes for light commercial vehicles, as well as sales of electric light commercial vehicles. Jinbei is a well-established Brand with 1.5 million customers in China and close to 162,000 sales in 2019.

With Renault expertise and technologies, RBJAC is modernizing Jinbei models and extending the line-up with a total of 5 core models by 2023. The joint venture will also export in the future.

Chinese EV Market: With 860,000 electric vehicles sold in China in 2019, China is by far the largest EV market in the world. EV sales are expected to reach 25% of the Chinese market by 2030.

Groupe Renault whas sold close to 270,000 electric vehicles in the world since 2011. It gives a strong competitive advantage in China as shown by the successful launching of Renault City K-ZE, the first joint venture EV car competing in A segment with the best local automakers.

Groupe Renault expect to reinforce its partnership with Nissan and Dongfeng within eGT to make K-ZE a worldwide car. A derivative for Europe based on 'Dacia Spring' concept will be sold from 2021.

JMEV is known as an agile and efficient EV player since its creation in 2015. With Renault support in terms of quality and technologies, JMEV will cover 45% of Chinese EV market in 2022 with 4 core models.

This new China strategy is aimed at enhancing Renault's competitive advantages to sustain a long-term presence in the Chinese market and maximixe synergies with Nissan under the new Alliance concept of 'leader-follower'.

"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 and more efficiently leverage our relationship with Nissan," said Francois Provost, Chairman of China region of Groupe Renault.