Renault ties up with Dongfeng Motor for Chinese plant

Renault ties up with Dongfeng Motor for Chinese plantAuto giant, Renault has entered into an agreement Dongfeng Motor Group Co to set up a plant in China under the company's plans to sell domestically made vehicles in the Chinese market by 2016.

France's second-largest automaker is planning to manufacture sport utility vehicles at the site, which will be a joint venture between the two companies. Carlos Ghosn, chief executive officer of both Renault and Nissan said that the joint venture will also work closely with Nissan Motor that already produces cars with Dongfeng in order to gain synergies in costs and technology.

Renault and Dongfeng signed the 7.76 billion yuan or $1.28 billion partnership agreement today in Wuhan, China for the joint unit. Renault is late to enter the Chinese market with locally made vehicles as rivals, Volkswagen AG, General Motors Co. and Toyota Motor Corp have been producing and selling vehicles in the Chinese market since several years in the world's largest auto market.

China Association of Automobiles Manufacturers data shows that French automakers accounted for just 3.1 percent of the passenger-vehicle market share during the first half of the year indicating the companies have lagged behind Chinese, German, Japanese, American and South Korean brands.