Geely acquires 34% of Renault Korea Motors in South Korea

Geely and Renault are further strengthening their ties in South Korea, where the Chinese manufacturer has just acquired 34% of Renault Korea Motors. The goal is to jointly develop and produce an ecological hybrid model in South Korea from 2024.

Last January, Renault and the Geely Group announced a collaboration agreement for the production of thermal and hybrid vehicles in South Korea. This collaboration, which is part of the plan Renaissance – was a follow-up to an initial announcement made in August 2021. Geely pledged to help Renault sell hybrid vehicles in China, while the French manufacturer would allow Geely’s subsidiary Lynk & Co to enter the market South Korea.

First effect with a 34.02% stake taken by Geely in Renault Korea Motors, formerly Renault Samsung Motors, or RSM for short. Note that the Samsung card still holds 19.9%.

According to the Bloomberg site, the financial deal was made through Centurion Industries Limited, a wholly owned subsidiary of Geely, which reportedly disbursed about $ 207 million (about $ 175 million). According to Renault Korea Motors, this participation will be “create synergies with Geely in South Korea, a market with strong growth potential“The goal was to compete with the Hyundai Group (Hyundai and Kia), which in 2021 had a 70% market share with 1.2 million vehicles sold. By comparison, Renault Samsung Motors had sold 61,000.

From 2024, the two entities will produce thermal and hybrid vehicles at the Renault Korea Motors plant in Busan (South Korea), of which Renault owns 80% of the shares. The vehicles produced will initially be reserved for the South Korean market before being exported.

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Future vehicles will be based on “Geely Group compact modular architecture (CMA) through its R&D center located in Sweden”And will also use Geely hybrid engines. As for Renault and its subsidiary, its contribution is limited to “their design experience and customer experience, while providing innovative technologies”.

Has a clash with Nissan been announced?

It remains to be seen the reaction of Nissan and Mitsubishi, excluded from these discussions. An anonymous source, quoted by the site Business time, reported that Nissan had not really appreciated not being involved in the discussions between Renault and Geely. This same source stated that the two companies “it tends to cooperate in areas such as research and human resources“but that”collaboration and communication had diminished”.

It is true that the Korean market is no longer relevant to Nissan and its luxury brand Infinity after its total withdrawal in December 2020 – after 16 years of presence – due to weak sales, the health crisis and the anti-Japanese sentiment; however, the conquest of the Chinese market, considered “the largest car market in the world“, in which Renault has embarked on another actor does not happen.

In fact, in May 2020, the Renault-Nissan-Mitsubishi alliance announced the ““leader-follower” scheme to improve the efficiency and competitiveness of vehicles and technologies”. Specifically, “each member will become a reference in the regions where it has the best strategic assets and will act as a facilitator and support for the competitiveness of others.”. Thus, Renault would be the benchmark for Europe, Russia, South America and North Africa, Nissan for China, North America and Japan and Mitsubishi for Asia and Oceania.

Renault’s new strategy of working more closely with Geely to (re) conquer the Chinese market could lead the French to “reconsider its capital ties with the Japanese carmaker“, dit the Bloomberg News business site last month.

Finally, we hope that this collaboration between Geely and Renault will be more fruitful than the marriage, recorded on September 6, 1993 and torn apart on December 2 of the same year (!), Between Renault and a certain Volvo, which since d has since become the property of … Geely 2010.

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