Renault weighs making cars with China’s Chery in South America

Renault and China’s Chery Automobile are in talks to partner on carmaking and sales in South America as both manufacturers pursue growth in the region, according to people familiar with the matter.

The discussions included plans for Colombia and Argentina, where Chery would gain access to Renault’s existing factory network in return for providing capital and product design, said the people, who asked not to be named because the deliberations are private.

The Chinese carmaker would use Renault’s plant in Envigado, Colombia, to make combustion-engine cars, with the majority rebadged under the Renault brand and the remainder sold as Chery vehicles, the people said. At Renault’s Córdoba factory in Argentina, Chery was considering investing in a plug-in hybrid pickup truck line, with Renault to serve as general distributor for the vehicles, they added. Talks were ongoing and it was not certain that a deal would be signed.

A Renault spokesperson declined to comment. Representatives for Chery did not respond to a request for comment.

Renault has been pursuing partnerships to bring costs down while tapping into growth markets. In Brazil, it is working with China’s Zhejiang Geely Holding Group on making and selling electric models and other low-emission vehicles. Working with Chery would not affect the Geely projects, the people said. Chery’s interest had intensified since its successful Hong Kong trading debut last week, they added.

The talks started under Renault’s former CEO Luca de Meo, the people said. His successor Francois Provost is understood to have adopted a more cautious stance on spending than De Meo, who had backed co-funding the South American expansion, the people said. As per the latest discussions, the Chinese company would fully fund the projects, they added.

South China Morning Post