Geely Automobile Holdings and Renault Group have reached an agreement under which Geely Auto will acquire 34.02% of the shares in Renault Korea Motors (RKM) through a capital increase mechanism.

The deal will be subject to the approvals by relevant authorities.

The companies say the deal will enhance the collaboration between Renault Group and Geely Auto in future projects around the launch of an all-new vehicle lineup for the South-Korean market as announced in January 21, 2022.

On completion, Geely Automobile Holding, via its subsidiary, Centurion Industries Limited, will hold 34.02% of the total issued share capital of Renault Korea Motors (RKM). Renault Group remains the majority shareholder in RKM and will continue to fully consolidate the entity.

In January, Geely Auto parent company, Geely Holding Group and Renault Group jointly announced a new collaboration dedicated to bringing an all-new vehicle lineup of fuel-efficient Hybrid Electric Vehicles (HEV) and Internal Combustion Engine (ICE) models to the South Korean market as well as ‘exploring overseas sales’.

The new vehicles will be produced at the current Renault Korea Motors facility in Busan, South Korea, with volume production forecast to begin in 2024.

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By GlobalData

The new products will utilize Geely Holding Group’s world-class Compact Modular Architecture (CMA), developed by Geely Holding Group’s R&D center in Sweden, as well as taking advantage of the Geely Holding Group’s advanced hybrid powertrain technologies.

The new product range will be sold through the existing RKM sales and aftersales network.

Both companies say they are fully committed to Renault Korea Motors by introducing a new product portfolio that will lead to greater market share in the South Korean domestic market whilst exploring export market opportunities.

Media reports note that a production base in Korea could be used by Geely to circumvent tariffs in the US applying to new cars imported from China.

A Reuters report suggested Geely might use the Busan plant to make electric robotaxis for Waymo.

See also: Geely and Renault sign agreement for cooperation in South Korea