Renault plans swift China production ramp-up

Dominique Thormann CFO of Renault Group - Renault plans swift China production ramp-up

Renault plans to add more Chinese production capacity to its new joint venture with Dongfeng Motor Group soon after manufacturing begins in 2016.

Renault is currently building its first Chinese factory to produce up to 150,000 vehicles annually. The company aims to increase its capacity in the country by as much as four times, Chief Financial Officer Dominique Thormann said.

“The plan is to expand our capacity to potentially reach more than 500,000 or even 600,000 units if we go through appropriate hurdles in the next few years,” Thormann told a conference in Paris on Tuesday.

Renault will start production of a large crossover at the plant in Wuhan at the beginning of 2016, the automaker’s China chief, Jacques Daniel, told Automotive News Europe at the Beijing auto show earlier this year.

Renault and Dongfeng won Chinese approval in December to begin production in a $1.3 billion joint venture under long-standing plans to introduce locally-assembled Renault models to the world’s biggest auto market.

The 50-50 venture builds on the presence of Renault’s Japanese alliance partner Nissan, which has its own venture with Dongfeng. Nissan, which is 43.4 percent-owned by Renault, has become Dongfeng’s most lucrative partner in the decade since their venture was created with explicit provisions for its extension to Renault.