Shaking it in China

Renault plans to join forces with the Chinese Dongfeng Motor Company to form a joint venture company in China that will make 300,000 Renault automobiles a year for the Chinese market by 2006.

Renault plans to join forces with the Chinese Dongfeng Motor Company (DFC) to form a joint venture company in China that will make 300,000 Renault automobiles a year for the Chinese market by 2006.

The first vehicle to be assembled by the joint venture will most likely be the Mégane Sedan. Others should follow, including a version of Logan adapted to the Chinese market.

The new project follows on the heels of an existing agreement between the two companies to create yet another joint venture – the Dongfeng Motors Company Limited (DFL) – which aims to produce 620,000 passenger vehicles and trucks in China in 2007.

Just last month, DFL opened its $217.9 million Guangzhou Huadu plant. With an initial annual production capacity of 150,000 cars, the plant will produce several new models for the Chinese market, starting with the 2004 model year Nissan Sunny, under an earlier agreement that DFL struck with Nissan, which is 44% owned by Renault.

DFL forecasts that its total sales revenues for 2007 including commercial vehicles and other business will reach $9.6 billion, doubling 2003 performance levels. Operating profits (including commercial vehicles and other business) are expected to reach $1 billion or 10% of forecasted sales.

DFL is also expanding and improving its dealer network. By 2007, DFL aims to reach over 400 sales outlets throughout China.

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