PARIS (AFP) – French automaker Renault said yesterday 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 focussed 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 cash flow 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.