PARIS/Shanghai (Reuters) – Three sources said that the French auto manufacturer and its Chinese partner Geely plans to announce a deal later this month to expand their cooperation in Brazil, and they are looking for new growth markets amid global trade wars.
The two companies have created a joint thermal engine project last year, and since then it has also started selling cars produced in a factory that is jointly owned by South Korea.
The familiar sources said that they are now planning to expand their partnership to Brazil, and they are working on an initial deal aimed at advertising later this month. They refused to call them because the talks are not yet general.
According to the deal, the Chinese company will start using the Brazilian retail network in Renault early this year to start sales of vehicle that has the GEELY exported mark from China.
The two sources said that the deal will also witness that Geely takes a minority stake in Renault Brazil and using the last Curitiba factory to assemble vehicles there. It is not immediately clear the volume of possible investment.
Renault and Jelly refused to comment. Geely’s plan was not reported to build its presence in Brazil by selling cars that were exported via the retail network in Renault. Les Echos earlier explained their talks on investment and local production.
This step will help enhance the use of capacity at the Renault Factory in Brazil, the fifth largest market abroad for the French company, and is compatible with its broader plan to reduce its dependence on the European market.
It will also help Geely, which extends the main export market, will help new markets as it wrestles with competition in home bruises and the huge definitions imposed by many advanced markets including the United States, Canada and the European Union on Chinese Chinese vehicles.
Amid the high trade and excessive trading in China, Chinese car manufacturers are exploring opportunities in markets such as Russia, South America, the Middle East and Africa for export growth.
Brazil was the fastest growth market for EVS and hybrid exports consisting of China last year, as shipments doubled more than 152,000 units, according to Cui Dongshu, Secretary -General of the China Automotive Association for Passengers.
He said he also became the second largest market for new Chinese energy vehicles – which includes electric and hybrid models – after Belgium.
In Brazil, Geely will sell cars under their own brand, unlike the Korean partnership that is currently focusing on one model bearing the Renault brand, Grand Koleos, based on Geely and manufacturing at a factory controlled by Renault in Busan, South Korea.
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