A conceptual agreement reached in January 2022 between Renault Group and Geely Holding Group, China’s largest privately-owned vehicle manufacturer and the country’s seventh-largest overall manufacturer, has seen both companies signing a share subscription and joint venture agreement.
Geely Holding Group, Geely Auto’s parent company, announced the new partnership aimed at introducing an all-new vehicle range of fuel-efficient Hybrid Electric Vehicles (HEV) and Internal Combustion Engines (ICE) models to the South Korean market, as well as exploring international sales.
Upon completion, Geely Automobile Holdings (0175. HK) would purchase 34.02 percent of Renault Korea Motors’ total issued share capital through its subsidiary, Centurion Industries Limited (RKM).
RKM’s largest stakeholder, Renault Group, will continue to completely consolidate the company.
Renault and RKM will collaborate to deliver cutting-edge technology, design skills, and customer experience to meet local market expectations.
The new vehicles will be manufactured at Renault Korea Motors’ present Busan facility, with volume production expected to commence in 2024.
The new product will be distributed through RKM’s current sales and service network.
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This capital increase, indicates Geely Holding Group’s and Renault Group’s strong belief in the South Korean market’s high potential, which will help the company’s “Renaulution strategy” succeed.
The “Renaulution strategy” aims to shift the company’s whole focus from volume to value.
The two automobile businesses’ ambition, to develop new product portfolios will result in a larger market share in the native South Korean market while also investigating the exploring market potential.
In 2017, Geely Auto surpassed Toyota as the most popular Chinese automobile brand. In Consumer Insight’s domestic automobile consumer survey, RKM after sales has been ranked best for six years in a row, through 2021.
