Renault Won't Start A New Chinese Joint Venture. It Already Has One

China Business News has the story (via Reuters) that Renault will start a joint venture with Dongfeng, and that “the two firms plan to invest a combined 6.5 billion yuan ($1.0 billion) in a plant in the central province of Hubei with an initial capacity of 200,000 cars a year.” The story promptly went as viral as a story about a Chinese joint venture can go viral.

Officially, the story elicited a “no comment”at Renault. Privately, after they were done yawning, contacts in Paris said that this is a non-story, but a popular one. News about a joint venture between Renault and Dongfeng appear with regularity, but they overlook the fact that Renault has had a joint venture in China for longer than most people seem to remember.

Since 1990, Renault had a joint venture with the China Sanjang Space Group called Sanjang Renault Automobile Co. The JV made vans such as the Renault Trafic, and MPVs like the Espace and the Scenic, built from CKD kits. The venture was not very successful. Eventually, company and contracts were bought by the Dongfeng Nissan joint venture. Years ago, Nissan and Renault CEO Carlos Ghosn referred to a “Golden Triangle” formed by Dongfeng, Nissan, and Renault. Renault had been part of the paperwork with Dongfeng from the get-go, with the understanding that production would start in earnest at an opportune date, says my Paris contact.

New joint ventures need approval from China’s National Development and Reform Commission NDRC, but the reports say that a new production license from the government is not necessary, because there still is one around. True enough, see above.

This does not keep Gasgoo from reporting that “ the National Development and Reform Commission has officially begun reviewing Dongfeng Motor and Renault’s proposal to establish a new joint venture partnership,” and that “of the world’s top ten leading automobile enterprises, Renault is the only one presently lacking a joint venture partnership in China.” Not true at all.

So the story about a new Renault JV is a yawner, but what about the billion dollar investment into a 200,000 unit factory? “I have not heard these figures,” said my Paris contact, who, after suppressing another yawn, promised to get back to me.