BOULOGNE-BILLANCOURT, France – Groupe Renault has become the first traditional foreign automaker to take majority control of a Chinese vehicle joint venture after the French automaker announced a ¥1 billion investment into JMEV, previously an electric vehicle subsidiary of now partner Jiangling Motors Corp. Group (JMCG).
With the investment, Renault has become a 50 percent majority shareholder in JMEV with JMCG holding 37 percent and the rest held by a Chinese fund company.
The move finalizes a first agreement reached on December 20, 2018 and now paves the way for Renault to further expand its footprint in China and is part of the overall strategy of JMCG and Renault. Through this JV, Renault will be able to expand its influence in China’s electric vehicle market, while JMCG will be able to integrate and leverage more resources, which will promote its rapid growth in the future.
JMEV becomes the fourth vehicle JV for Renault in China after Dongfeng-Renault, Renault Brilliance and eGT, a JV established with Renault and Nissan, making the French automaker the foreign automaker with the most number of JVs in China.
It also represents numerous firsts: Renault is the first foreign automaker to have two JVs with the same Chinese partner (Dongfeng) and the first to have JVs with three different Chinese partners (Dongfeng, Brilliance and JMCG). Not counting Tesla, BMW is so far the only other foreign automaker that plans to take majority ownership of a JV (75 percent in BMW-Brilliance, but that won’t take effect until 2022).
“China is a key market for Groupe Renault. This partnership in electric vehicle business with JMCG will support our growth plan in China and our EV capabilities,” said Francois Provost, senior vice president, chairman of China Region, Groupe Renault. “As a pioneer and leader in the European EV market for 10 years, we will capitalize on our experience in EV R&D, production, sales and services.”
“Adhering to the concept of openness and cooperation, JMCG is one of the first domestic enterprises to introduce international strategic partners,” said Qiu Tiangao, chairman of JMCG. “By partnering with Groupe Renault, JMEV will be able to elevate its comprehensive competitiveness to a new level and penetrate into China’s electric vehicle market.”
Set up in 2015, JMEV quickly obtained the certification to manufacture battery electric passenger vehicles and made rapid breakthroughs in building up its research capability, supply chain, production capacity and market deployment, forming a full value-chain operation ecosystem in R&D, production, supply and sales for complete vehicle and critical components. The company has become a prominent player in China’s electric vehicle market operated by a young and energetic team.
JMEV will continuously complete its deployment in EV and connectivity technologies and strive to build a full range of new vehicles to support the EVEASY Brand.
Renault’s controlling stake in JMEV will help the French automaker take care, at least partially, one of the biggest issues facing the company in China: negative corporate average fuel consumption (CAFC) points. According to passenger vehicle manufacturer and importer CAFC and NEV credit results in 2018 released by the Ministry of Industry and Information Technology (MIIT) on July 2, Renault had more than negative 85,000 points in CAFC credits via its Dongfeng-Renault and Renault Brilliance JVs, which it needs to correct with positive NEV credits but up to now it had none in that category.
Renault is also trying to meet its target to sell 550,000 vehicles in China a year by 2022, as part of its “Drive the Future 2022” plan announced back in October 2017. Last year the company sold 216,699 vehicles in China, but that number included 163,965 vehicles under the Jinbei and Huasong brands, or more than three-quarters of the total with the rest coming from Renault vehicles.
In the first half of 2019, the company sold 89,714 vehicles in China, down 23.7 percent. Less than 9,000 units of those were Renaults. It is slated to launch the locally produced City K-ZE EV and Captur small SUV later this year.