CHENNAI, India--French auto maker Renault S.A. (RNO.FR) is
considering selling electric vehicles in China through a $1.2
billion joint venture with Dongfeng Motor Group Co. (0489.HK), as
it seeks to expand sales in the world's biggest car market by
volume.
Chief Operating Officer Carlos Tavares said Renault has just
received approval from China's environment ministry to set up the
joint venture with Dongfeng. The proposal will require approvals
from other government departments in China.
The Chinese government had included a green-vehicle component to
the joint-venture proposal. The planned 7.2 billion yuan ($1.2
billion) joint venture will have annual production capacity of
150,000 passenger vehicles, including sports utility vehicles and
multi-purpose vehicles, China's Hubei Environmental Protection
Bureau said in January. According to the bureau, the joint venture
will have a factory at Wuhan, the capital of central Hubei
province.
Dongfeng is China's second-largest car maker by production and
sales after Shanghai-based SAIC Motor Corp. It also makes cars with
Nissan Motor Co. and Kia Motors Corp.
"It was for us a competitive advantage and very nice coincidence
that the Chinese authorities request that we bring EV technology to
the JV we have with Dongfeng, which we are happy to do," Mr.
Tavares told reporters late Wednesday.
Mr. Tavares said a decision has yet to be taken about the models
that would be introduced in China, but pointed out that Renault "is
the only car maker in the world with four electric vehicles on
sale."
"So, we just have to decide which one we are going to bring to
China. That is something we will decide with our partner at an
appropriate moment," he said.
Renault recently started selling the Zoe electric vehicle in
Europe. It also makes the Twizy, Kangoo and Fluence models.
Renault is one of the few global car manufacturers that doesn't
have a production facility in China. The company sold 29,724
vehicles in China last year, up 22% from a year earlier. French
competitor PSA Peugeot Citroen, which makes cars in China, sold
more than 440,000 units in the country last year. General Motors
Co., the largest foreign car maker in China, sold 2.84 million
vehicles.
Nissan, Renault's global partner, has had a partnership with
Dongfeng since 2002, and is the biggest Asian car maker in China by
sales.
Mr. Tavares said Renault has a majority 51% share of the
electric-vehicle market in Europe, although its share of the
overall European car market is 9%.
He said Renault is willing to sell its electric vehicles in
India, provided the government issues incentives and creates the
necessary infrastructure such as car-battery charging points. He
cited the example of France where Renault gets 7,000 euros for
every electric-vehicle sold to compensate for the higher cost of
manufacturing them.
"If you don't get incentives to support the pricing to be
attractive, then it doesn't spark," he said.
Write to Santanu Choudhury at santanu.choudhury@dowjones.com
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