PARIS — Renault sought to make a splash on the Chinese market in the middle of the 2010s with a SUV-focused lineup, a new factory with Dongfeng Motor as joint venture partner, and a goal of selling 550,000 vehicles a year by 2022.
The automaker effectively left China this week, a victim of poor sales and an already weakening market that has been crippled since February by the coronavirus outbreak. Renault’s overall 2019 sales were just 179,494 units — and only 18,607 were Renault branded passenger cars. The rest were aging SUVs and passenger vans from another joint venture, with Brilliance Jinbei.
Renault Group is dissolving the Dongfeng partnership but says it will remain in China through electric vehicles, including a version of the Kwid mini-SUV sold under a number of Chinese brand names and future models developed with Jiangxi Jiangling Group; and light-commercial vehicles with Brilliance Jinbei. And it will continue to work on powertrains and components with alliance partner Nissan and Dongfeng.
But the gleaming factory in Wuhan built to produce Renault SUVs — the Captur, the Kadjar and the Koleos — will revert to Dongfeng. Most of the plant’s planned annual capacity of 150,000 vehicles was never used.
“We will concentrate on electric vehicles and light commercial vehicles, the two main drivers for future clean mobility and more efficiently leverage our relationship with Nissan,” said Francois Provost, the chairman of Renault Group’s China region.
To be sure, Renault brand’s early exit from China was given a push by the Renault-Nissan alliance’s shaky finances and the need to find more synergies with Nissan. The automakers are expected to roll out a turnaround plan next month that will most likely include plant closures and a retreat from unprofitable markets, such as China. And early this year the alliance announced a “leader-follower” strategy that cedes regions such as China to one automaker, in this case Nissan.
The venture with Dongfeng, known as DRAC, reported an operating loss of more than 1.5 billion yuan ($212 million) in 2019.