Renault given Chinese nod for $1.3 billion Dongfeng venture

French car maker Renault to deploy ambitious 50-50 partnership with Dongfeng.

Renault has received a green light from Beijing authorities to begin Chinese car production in a $1.3 billion joint venture with Dongfeng Motor Group, the carmakers said on Thursday.

The approval gives the go-ahead for the French carmaker’s longstanding plans to introduce its own locally assembled models in China, building on the presence of alliance partner Nissan and its existing venture with Dongfeng.

The 50-50 partnership “will allow Renault to deploy its ambitious strategy in the world’s largest automotive market”, the French company said in a statement.

Renault is a relative latecomer to China, where fast-growing demand for cars has helped peers including PSA Peugeot Citroen and Volkswagen to offset some of the lost sales during a six-year European market slump.

The rubber stamp from China’s National Development and Reform Commission comes more than nine years after Renault and Dongfeng first announced joint venture plans in June 2004.

At the Beijing auto show in April last year, Renault showed a Talisman model adapted for China from the SM7 sedan manufactured by its Renault Samsung Motors division.

The combined operation, Dongfeng Renault Automotive Co, will produce cars and engines under the Renault and Dongfeng brands with annual capacity for 150,000 vehicles. It will also cover research and development, purchasing and marketing.

The venture is backed by an initial investment of 7.76 billion yuan ($1.3 billion), Dongfeng said in a Hong Kong filing. More details are due to be announced at a Dec. 16 signing ceremony. ($1 = 6.0916 Chinese yuan)