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Automotive Industry
Renault and China’s Chery are in talks to partner on car manufacturing and sales in South America, as both automakers pursue growth in the region, according to people familiar with the matter.
The discussions include plans for Colombia and Argentina, where Chery would get access to Renault’s existing factory network in return for providing capital and product design, said the people, who asked not to be named because the deliberations are private.
The Chinese automaker would use Renault’s plant in Envigado, Colombia, to build combustion-engine cars, with the majority re-badged under the Renault brand and the remainder sold as Chery vehicles, the people said.
At Renault’s Cordoba factory in Argentina, Chery is considering investing in a plug-in hybrid pickup line, with Renault to serve as general distributor for the vehicles, they added. Talks are ongoing and it’s not certain that a deal will be signed.
A Renault spokesperson declined to comment. Representatives for Chery did not respond to a request for comment.
Renault’s Geely partnership will not be affected
Renault has been pursuing partnerships to bring costs down while tapping into growth markets. In Brazil, it’s working with China’s Geely on making and selling electric models and other low-emission vehicles. Working with Chery would not affect the Geely projects, the people said. Chery’s interest has intensified since its successful Hong Kong trading debut last week, they added.
The talks started under Renault’s former CEO Luca de Meo, the people said. His successor, Francois Provost, is understood to have adopted a more cautious stance on spending than De Meo, who had backed co-funding the South American expansion, the people said.
According to the latest discussions, Chery will fully fund the projects, they added.
Chery has been China’s top car exporting brand every year since 2003, according to Frost & Sullivan. The automaker has experience working with Western companies. It builds Jaguars and Land Rover models in China and has plans to grow overseas amid tough competition at home.
Chery’s lineup includes a high proportion of relatively affordable fuel-powered vehicles that are well-suited to emerging markets.