Dongfeng-Renault JV Comes to a Halt

Renault and Dongfeng are still involved in negotiations regarding a possible joint venture but, according to some reports, the talks might be stopped again due to a number of glitches. It appears the two companies are unable to reach an agreement on three major issues: the future of Dongfeng, the location of the production plants and the Chinese market from the point of view of competition for Renault.

According to China Car Times, Dongfeng is looking to expand its operations individually and avoid serving as joint venture for global carmakers. Dongfeng is already collaborating with Honda, Kia, Citroen, Peugeot, and Nissan.

Furthermore, Renault is looking to produce its models at the two factories owned by Nissan in China. The French manufacturer wants, according to the aforementioned source, to build its Chinese models in Huadu, Guangzhou alongside Nissan's vehicles. Several models designed by Renault are based on the same platform as Nissan vehicles, so such a decision would make sense when it comes to Renault's evolution in China.

Last but not least, Renault is still not sure that starting building cars in China would be a smart investment, mostly when looking at the sales volumes the company has posted in the previous years. For example, Renault is currently owning a total of 33 dealers in China, but only sold less than 1,000 units in 2008.

Dongfeng on the other hand will invest around $250 million in a new production facility in Turkey that will help the Chinese manufacturer seek new buyers in Europe. The plant is projected to roll off 52,000 units per year and employ around 1,000 workers.