SUV Market Irresistibly Hot For Renault
BMI View : Renault and Dongfeng have entered into a US$1.3bn JV to produce SUVs as part of Renault's strategy to sell locally produced cars in the Chinese auto market by 2016, which validates BMI's view of European automakers needing to diversify away from their weak regional market. While Renault will face challenges in making its brand stand out among established competitors, the strong growth potential of the SUV segment will provide support to the firm's strategy.
French carmaker Renault and Chinese automaker Dongfeng Motor have recently entered into an agreement for a CNY7.8bn (US$1.3bn) production joint venture (JV) to make cars and engines for both firms. The pair will also work with Renault's global alliance partner, Nissan Motor, to gain synergies in costs and technology. This development is part of Renault's plans to sell locally manufactured vehicles in the Chinese auto market by 2016.
Renault Seeks To Diversify Out Of Europe