Geely and Renault are courting each other in Asia
The car manufacturers Geely and Renault plan to cooperate on introducing hybrid vehicles in China and South Korea. A corresponding memorandum of understanding has now been concluded.
According to Geely, the cooperation is intended to accelerate the ‘Renaulution plan‘, the French company’s current strategy. In concrete terms, hybrids are to be sold under the Renault brand in China but also under the Geely brand Lynk & Co. in South Korea.
The cooperation is possible because of the “open source strategy of Geely Holding”. The hybrid vehicles for China, which have not yet been specified in detail, are based “on Geely Holding’s existing technologies and mature industrial footprint” – in other words, on the Chinese company’s technology.
This means that Renault will only be responsible for distribution. “Renault will contribute in the fields of branding strategy, channel and service development, and defining an appropriate customer journey,” Geely explains.
In South Korea, the MoU enables Renault Group and Geely Holding to “jointly explore localization of vehicles based on Lynk & Co’s energy-efficient vehicle platforms for local markets”.
Geely’s daughter Lynk & Co was created in 2016. For the moment, it uses the ‘Common Modular Architecture’ (CMA), the platform Volvo (another Geely daughter) uses for its smaller cars like the XC40.
The platform enables various hybrid and plug-in hybrid drives and purely electric vehicles, but these are apparently not part of the cooperation. The SEA pure electric platform, on which future models of Geely brands are to be based, seems not to be involved in the current agreement.
Collaborations beyond the current Memorandum of Understanding are explicitly possible. “Both partners will continue to seek a deeper potential partnership in terms of an open and innovative partnership model,” Geely said.
Renault in China and Korea
Last year, Renault admitted that the worldwide volume strategy of its former CEO Carlos Ghosn was a complete flop in China.
The troubled carmaker decided to almost entirely retire from China. Only electric cars would still be offered, and LCVs made in cooperation with its Chinese partner Brilliance. In the first six months of this year, Renault sold 13 800 vehicles in China.
Renault and Alliance partner Nissan are also present in China through their joint enterprise with the Chinese car giant Dongfeng. In a co-owned plant, the electric Dacia Spring is now produced, the successor of the Renault K-Ze, which has never been a success in China.
The French company is also active in South Korea through Renault Samsung Motors (RSM). All models are based on vehicles or platforms from Renault or alliance partner Nissan; the RSM QM6, to take a recent example, is, in fact, a rebadged Renault Koleos.
And about the Alliance?
Surprisingly, the Renault/Nissan/Mitsubishi Alliance is not once mentioned in the MoU. Not so long ago, the respective partners had decided to split the world into three ‘influence zones’ where one of them was the ‘leader’ and the other two ‘followers’. In this scheme, Nissan is the leader in China.
The venue of Luca de Meo (ex-Seat) at the helm of Renault has changed this apparently. At his arrival in Paris, de Meo declared that “a carmaker that ignores China is like a table with a leg missing”.
Alpine as the new trump card?
It seems obvious now that de Meo has chosen a strong Chinese partner to start to reconquer the Chinese market. The sentence about “seeking a deeper potential partnership” says all.
But de Meo has another trump card up his sleeve. The Chinese appreciate luxury electric cars with a history or a pedigree, most of them with a European background. That’s where Alpine, Renault’s revived sports brand, is coming in.
Renault recently announced that as of 2024, Alpine would have three fully electric models, one of them being an SUV. Thus, the tiny but renowned sports car maker, which has now come into Formula One instead of its mother brand, can act as a spearhead to conquer the Chinese market again.
It’s clear now that Renault will bet on different options to make things possible in China. They’ve obviously learned from their mistakes and failures, and if Geely can help achieve this, the other Alliance members will have to accept this.