Renault and Geely are reportedly close to a deal that would lead to producing hybrid models at Renault’s legacy Samsung plant in South Korea. The JV plan would help Renault get access to the Chinese market and help Geely penetrate the Korean market, with the two sharing costs on bringing a new range of hybrids to market.
Reuters also reported that the plan could enable Geely to ship Korean made Lynk brand models duty-free to the US.
The JV would also enable Renault to get a foothold in China by forming a new, plug-in hybrid-focused brand that will be managed jointly by it and Geely, the report said.
The JV would also help to utilize unused capacity at the Renault Samsung plant in Korea.
Data held in GlobalData’s database shows that the struggling Korean Renault Samsung plant made an estimated 120,000 cars in 2021 but has the capacity to make 300,000 units a year.
Under the proposed JV, the two makers would reportedly work together on a new lineup of cars that use Geely’s so-called Compact Modular Architecture (CMA), an engineering architecture shared by Geely and Volvo. There would also be an opportunity to share supply chains and manufacturing facilities in China, according to anonymous sources cited in the Reuters report.
However, any exports from Korea to the US would have to satisfy US customs authorities on localization rates.
The report also said the Geely model lined up for production at the Samsung plant is the Lynk & Co brand 01 crossover.