BEIJING — Volvo Car owner Geely will team up with the Renault group on hybrid vehicles in China and South Korea, in the latest European alliance for the largest private-sector Chinese automaker in the world’s biggest auto market.
Zhejiang Geely Holding Group is expected to take a majority stake in a new joint venture under a memorandum of understanding announced Monday.
For Renault, the deal marks a renewed push into China. Geely is expected to provide hybrid technology for production at its own group factories, allowing its French partner to focus on brand strategy and sales.
Renault said in 2020 that it would end a passenger car joint venture with state-owned Dongfeng Motor. It has focused on commercial vehicles and electric vehicles in China.
The terms of the Geely venture were not disclosed. Geely-made Renault cars could hit the market in two to three years, but no specific timeline was announced.
To accelerate development of Renault-branded vehicles, Geely may draw on the connected-car brand Lynk & Co. it has co-developed with Swedish unit Volvo Car.
Renault, part of an automaking alliance with Japan’s Nissan Motor and Mitsubishi Motors, is eyeing a slice of what stands to be an enormous market for low- and zero-emissions cars. By 2035, China’s government envisions hybrids constituting half the market for passenger cars, with the rest coming from electrics and other so-called new-energy vehicles.
In South Korea, Geely and Renault have begun research, with tentative plans to use a Lynk & Co. platform to create passenger cars tailored to local buyers. The Geely tie-up could help curb development costs for struggling group member Renault Samsung Motors.
Geely is a key player in China’s strategy of becoming a global automobile powerhouse, with Chairman Li Shufu said to enjoy a strong relationship with Chinese President Xi Jinping.
Geely acquired Volvo Car from Ford Motor in 2010, and after Li became a large shareholder in Germany’s Daimler, Geely turned Daimler’s Smart luxury minicar brand into a 50-50 venture.
Geely is also working with Baidu join the country’s heated electric-car race, readying to handle production for the Chinese search engine group. The alliance with Renault creates further potential to scale up Geely’s operations.
Monday’s announcement on the new memorandum of understanding says the focus will be on “fast-growing Asian markets,” fueling speculation that the partners will look to Southeast Asia next.