$1.2 Billion Investment In Dongfeng-China JV from Renault- GM

Northern, WI 1/22/2013 (avauncer) -To increase its sales in the world’s leading car market, French auto giant,Renault SA REIGIE NAT (PINK:RNSDF), has laid down plans for a joint venture with China’s Dongfeng Motor Group. The JV is supposed to be valued at around $1.2 billion.

The joint venture will target an annual output of 150,000 cars which will also include SUVs and MPVs. These figures are based on the information gathered from the Hubei Environmental Protection Bureau website which is evaluating the environmental effects of this facility.

The capital of central Hubei province, Wuhan, is designated to be the base for this new venture. This comes as no surprise as Dongfeng’s other ventures with PSA Peugeot Citroen SA and Honda Motors, are also based in Wuhan.

Dongfeng ranks second after the SAIC Motor Corp., in terms of production and sales volumes. It also has joint ventures with Nissan Motors and Kia Motors.

A Wuhan government spokesman said that the joint venture would get underway sometime in May but this was not confirmed by any official from Dongfeng Motors or Renault SA REIGIE NAT (PINK:RNSDF).

There are only a handful of auto-makers that don’t have a manufacturing presence in China and Renault is one of them.

Sales of Renault SA REIGIE NAT (PINK:RNSDF) vehicles in China stood at 29,724 units last year. It is a much less compared to the 440,000 units sold by PSA Peugeot Citroen and far below the staggering 2.84 million units sold by General Motors Company (NYSE:GM) which ranks as the largest foreign auto-maker in China.

Renault SA REIGIE NAT (PINK:RNSDF) also has a joint venture with Nissan Motors, which in turn has been associated with Dongfeng Motors since 2002. According to sales figures, Nissan boasts to be largest Asian auto-maker in China.

Renault SA REIGIE NAT (PINK:RNSDF) shares were up 5.35% to close at $57.68. General Motors(NYSE:GM) shares were down by 0.71% to close at $29.28.