Renault and Geely to Announce Joint Venture for Hybrid Vehicles

French multinational automobile manufacturer Renault (FP: RNO) and Geely Holding are likely to announce a joint venture to produce hybrid vehicles. Citing sources, Reuters revealed that Renault and Geely would develop Chinese automaker’s hybrid vehicles in South Korea. In addition, Geely and Renault are considering the possibility of exporting cars duty-free to the US.

Notably, the joint venture between Geely and Renault has been in progress since early this year, and it also involves joint operations in China. With the partnership, Renault will be able to find its way back to China after it exited the market last year. Also, the French automobile manufacturing company will expand its presence in Asia through the deal, and at the same time, strengthen its struggling business in South Korea.

Renault and Geely to Likely Establish a Joint Venture Soon

According to the sources, Geely will expectedly collaborate with Renault to develop a new lineup of green cars. The cars will use Geely’s Compact Modular Architecture (CMA). CMA is manufacturing equipment shared by Geely and Volvo. In addition, Geely will be in charge of the supply chain while Renault will manage the designing, selling, and marketing of the new brands in China. In addition, Geely will have access to the assembly plant in South Africa, which belongs to Renault. The partnership could further serve as a foothold for Geely for South Africa’s manufacturing and vehicle sales for more than two decades through access to Renault’s assembly plans and a local brand with a Samsung Group unit.

Furthermore, the Reuters report stated that Geelyisplanning to produce the Lynk & Co 01 sport-utility vehicle at Renault’s plant in southeastern South Korea. As such, Geely intends to localize the production of some specific Lynk hybrid vehicles in South Korea. The company will also line up a local supply of parts. Currently, the Lynk & Co 01 model has three powertrain options. They include petrol, petrol-hybrid, and plug-in electric hybrid.

Geely Actively Seek Partnerships with Major Tech Firms

Geely has been consistently looking to bolster its tech prowess through partnerships. The company has been seeking major alliances with tech giants. Geely and tech company Tencent Holdings teamed up to develop smart car tech at the beginning of the year. The companies came together to work on driverless and smart car technology, exploring “digitization, intelligent cockpits, autonomous drive, and low carbon development.” Geely issued a statement concerning the agreement with Tencent, saying:

“Tencent will help Geely complete the digital upgrade of the “full user life cycle” and build a “people-centric” digital service system. At the same time, the two parties will jointly promote the low-carbon development of the entire automotive industry chain, explore the joint construction of a “carbon neutral” open platform, work together to enhance the corporate ESG governance level, and explore long-term sustainable development.”

Following the announcement, Geely’s shares on the Hong Kong stock exchange climbed more than 13%.

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