China’s fourth-largest vehicle maker, Dongfeng Motor Corp., hopes to seal a car-making deal with Renault SA by the end of the year, though progress was now stalled, Dongfeng’s president told Reuters on Thursday.
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The French firm reportedly has said it hopes to make 150,000 cars a year in China starting 2007, but chief executive Louis Schweitzer reiterated at this month’s Geneva motor show that it would not rush into the world’s third-biggest auto market.
“Progress is at a standstill,” Dongfeng President Miao Wei told Reuters in an interview in Beijing. “The other side has not given any reason. I believe it’s because of the change in CEO.”
Reuters noted that Renault’s new CEO Carlos Ghosn is due to replace Schweitzer in May, heading both Renault and Nissan Motor Co., in which the French firm has a 44% stake.
Dongfeng already makes cars with Nissan, PSA Peugeot Citroen and Kia Motors Corp., the report said, adding that Miao said the company still hoped to conclude the Renault deal by year’s end.
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By GlobalDataDongfeng, once a military unit that cranked out trucks from secluded valleys in the mountains of central Hubei province, is also planning a Hong Kong listing this year, sources close to the deal told Reuters.
Dongfeng had planned to raise $1 billion from a Hong Kong listing last year, but reportedly has scaled that back to around $600 million as car sales slowed from the first half of 2004.
Miao told Reuters Dongfeng’s output should rise about 13% this year to over 600,000 vehicles but he ruled out buying local or overseas automakers for the time being, saying there was plenty of opportunity but the time was not yet right.
