Renault SA, France’s second-biggest automaker, received final approval from Chinese authorities to build its first factory in the world’s largest car market under a venture with Dongfeng Motor Corp.
China’s National Development and Reform Commission, or NDRC, allowed the carmaker’s to set up production for Renault vehicles in the country, the Boulogne-Billancourt-based company said today in an e-mailed statement.
The companies will invest 7.76 billion yuan ($1.27 billion) and produce 150,000 multi-purpose vehicles and engines a year, Dongfeng said in a separate statement.
Renault, which sells about 50 percent of its vehicles in Europe, intends to reduce its reliance on the region, where car demand is at a two-decade low. The French carmaker’s entry into China trails competitors such as Volkswagen AG by decades. Local production is key for competing in China because imported cars are levied with a 25 percent tariff.
The French carmaker has sold fewer than 30,000 cars this year in China, a stark difference from its Japanese partner Nissan Motor Co., which delivered more than 1 million vehicles in the country, ranking third among global carmakers in China.