Renault investment in China EV
Renault announced this week an investment of almost 130 million Euro for a 50% share in a joint venture with Chinese OEM Jiangling Motors Corp., better known by its abbreviation JMCG. Renault states that “[the] partnership in electric vehicle business with JMCG will support [the] growth plan in China and [its] EV capabilities.”
Akin to so many Chinese companies, the JMCG holding is linked to a web of JVs, subsidiaries and partner companies. As such, the company is linked to Isuzu and Ford. Part of the web is also a company called “JMEV”, of which JMCG holds 43% and which is in its turn co-owned by Chinese state owned organisations, such as the China Agricultural Development Construction Fund. JMEV makes electric vehicles since 2014. This is the company Renault is investing
By acquiring a stake in JMEV, Renault is not intruding the JMCG holding, that will continue collaborating with other brands and producing under its own brand. This is confirmed by the words of JMCG’s Chairman, Qiu Tiangao, who doesn’t mention the JMCG brand: “By partnering with Groupe Renault, JMEV will be able to elevate its comprehensive competitiveness to a new level and penetrate into China’s electric vehicle market.”
Mergers and quarrels
Renault is still recovering from its failed merger with FCA, which was blown off after disagreements with the French Government (who would lose its double digit share in Renault in case of a merger) and Nissan (not keen to fully merge with Renault, which was one of FCA’s conditions). It’s also paying a high price for its missed ambition: 1 billion Euro, to be exact, to grow its EV production in France – and to smoothen the relationship with the French Government.
When it comes to Nissan, Renault is not embellishing its latest decision. A Renault spokesperson said that this investment will help Renault expand its electric capabilities beyond a production agreement with longstanding partner Nissan Motor Co. and Dongfeng Motor Corp. It’s worth mentioning that Dongfeng and Nissan have been collaborating since 2002, whereas the Dongfeng-Renault relationship is much younger (2013).
It’s obvious that the new JV helps Renault kickstart EV production in China; even if growth in the car market is decreasing, the Chinese EV market is still a lucrative business and worth the investment. Nevertheless, question remains how Renault will hold up against its alliance partner, Nissan, and what move Nissan is preparing.