French carmaker Renault is planning to establish a new joint venture (JV) with Dongfeng Motor Group to build cars in China.
The continual economic crisis in Europe and decline in sales margins for domestic firms in China have led to the formation of new car manufacturing venture.
Following the anticipated approval for the new JV from the National Development and Reform Commission (NDRC) by the end of 2012, both the firms are planning combined investment of about CNY6.5bn ($1.03bn) to build a new vehicle manufacturing facility in the central province of Hubei.
Renault Greater China chief executive Chen Guozhang was quoted by China Business News as saying: "The planned JV would operate a plant formerly used by Renault when it had a local partner in the mid-1990s."
The local news agency also reported that the new plant will have an initial manufacturing capacity of 200,000 cars per year.
Dongfeng Motor Group also has car manufacturing JVs with Japanese carmakers Nissan Motor and Honda Motor as well as with French carmaker PSA Peugeot.
Renault is aiming to double its sales in China in 2012 to 42,000 units and about 48,000 cars in 2013 and is also planning to increase its dealerships in China to 170 through 2014.
