Geely to own a third of Renault Korea for Korean, export mkt expansion

Geely Automobile Holdings, China’s largest privately-owned automotive group, will buy nearly a 35 percent stake in Renault Korea Motors to team up with the South Korean unit of Renault S.A. as its second-largest shareholder to expand their presence in the Korean green car market and overseas sales.

Geely Automobile under Geely Holding Group has agreed with Renault Group to buy 34.02 percent of Renault Korea Motors’ shares, Renault Korea Motors said on Tuesday. Geely Automobile Holdings also announced in a stock exchange filing it will hold the equity of Renault’s Korean unit for about $210 million through a capital increase mechanism.

The equity investment represents a concrete step for cooperation between the two automotive groups after their initial agreement to joint launches of eco-friendly cars in Korea in January. Those vehicles will be produced at Renault Korea Motors’ Busan plant in South Korea with commercial production starting from 2024. The two will also jointly explore various overseas sale opportunities, especially the United States.

Their joint hybrid EV models will be based on Volvo’s CMA Platform and hybrid technology. CMA was applied to Volvo’s new electric vehicle C40 Recharge. Geely owns over 15 vehicle makers, including Volvo, under its arm.

For their hybrid EV models, Geely will provide technical support from its R&D center in Sweden, while Renault Group is responsible for vehicle design.

Renault Korea Motors researchers will participate in the development of new cars equipped with cutting-edge features that meet the needs of Korean consumers. Renault Group will be able to leverage Geely's lineup and technology in addition to its design and manufacturing capability built on the Nissan and Mitsubishi network. They will be also able to jointly explore global markets with new EV models if they satisfy demanding Korean consumers, a market watcher said.

Renault Korea Motors’ chief executive Stephane Deblaise said that Geely Group’s equity investment means its commitment to active cooperation and synergy in the development of joint models for the high potential of the Korean market.

Renault Group will remain the majority shareholder in Renault Korea Motors with an equity ownership of 46.08 percent, down from 80.1 percent. Samsung Card will remain the third shareholder of the carmaker with 19.9 percent.

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