Renault-Nissan and China's Dongfeng Motor Group said yesterday they will set up a new joint venture to develop electric vehicles in China.
The Hubei-based joint venture, eGT New Energy Automotive Co Ltd, will focus on developing and selling electric vehicles in the China market. The electric vehicles will be made at Dongfeng plant, which has a production capacity of 120,000 vehicles a year, from 2019.
EGT will tap electric vehicle technologies and car design expertise from Renault-Nissan, and take advantage of competitive manufacturing costs from Dongfeng, according to the statement published by the companies. The value of the deal has not been disclosed.
"This marks a deepened and strengthened strategic cooperation between Dongfeng and Renault-Nissan," said Zhu Yanfeng, chief executive officer of Dongfeng.
"We expect to meet the transformation trend of the market in China, where cars are becoming light, electric, intelligent, interconnected and shared," Zhu added.
Under the agreement, Renault will hold 25 percent of eGT, Nissan will own 25 percent and Dongfeng the remaining 50 percent.
Carlos Ghosn, chairman and chief executive officer of Renault-Nissan, said the creation of the new joint venture with Dongfeng will develop competitive electric vehicles for the Chinese market.
Global automakers are investing heavily to develop electric vehicles for China, responding to rising demand and government pressure on the industry to speed up technology development.
Chinese planners see electric cars as a promising industry and a way to clean up smog-choked cities.
They have supported sales with subsidies to buyers, while a proposed quota system will require automakers to meet targets for electric vehicle production or buy credits from competitors that do.
China is the world's largest market for electric vehicles.
Sales of pure-electric and gasoline-electric hybrids in China rose 50 percent last year over 2015 to 336,000 vehicles, accounting for 40 percent of global demand.
Renault SA and Nissan Motor Corp share technology and production under an alliance.