Two weeks after the government green light, Carlos Ghosn, chairman and CEO of Renault, and Xu Ping, chairman of Dongfeng Motor, on Monday (16 December, 2013) signed a contract for the creation of a new joint venture company for localised production in China: Dongfeng Renault Automotive Company (DRAC).
The final approval by the the National Development and Reform Commission of China (NDRC) was granted on 2 December.
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The spend for the 50/50 JV totals CNY7.76bn (EUR870m).
The JV will build a new car plant which will start producing vehicles in 2016. The plant will have an initial production capacity of 150,000 vehicles per year, with the potential for double that in the near future.
This plant will be located in the capital of the Hubei province, Wuhan. It will cover a total area of 95 hectares and will lead to the creation of 2,000 new direct jobs.
DRAC’s product plan will begin with a new range of Renault crossover vehicles. At a later stage, the new joint venture will introduce a range of products under a local brand.
The Renault brand currently sells imported cars such as the Koleos and Fluence in China.
In 2013, Renault imported vehicles sales will exceed 30,000 vehicles in China. The group is developing its network, set to grow from 92 dealers in 2013 to 120 by 2016.
