Renault creates the joint venture with Chinese Dongfeng for 870 million euros

French carmaker Renault has signed an agreement with the Chinese manufacturer Dongfeng to establish a joint venture Dongfeng Renault Automotive Company (DRAC) in Uhan, which the parties will have on an equal footing.

The volume of investments in the joint venture, the establishment of which was approved by the regulators of China on December 2nd, will be 7.76 billion yuan (870 million euros). DRAC will begin the construction of a new plant with capacity of 150,000 units per year and in the future this figure would double. Production will begin in 2016, said the agency “Prime”.

Initially the plant will produce crossovers branded by Renault, and it is planned to produce vehicles under the local brand at a later stage. The French company is increasing consistently its presence in the emerging China market, by planning to expand its dealer network to 120 dealers from 92 centres nowadays. The joint work with a Chinese partner will open for Renault a new source of profit, alternative to the European market, sales volume in which fell by 60% for the last year.