Carlos Ghosn, Chairman and Chief Executive Officer of Renault and Xu Ping, Chairman of Dongfeng Motor, recently inked a contract for a new joint venture company to locally produce vehicles in China.
It will be called Dongfeng Renault Automotive Company (DRAC) with an initial capital of 7.76 billion CNY (€870 Million).
The 95-hectare Dongfeng-Renault manufacturing plant will be built in the capital of the Hubei province, Wuhan. Employing 2,000 people, the initial estimated production is 150,000 units with the capacity to produce double that.
The plan is to manufacture a new range of crossover vehicles under the Renault brand and at a later stage to introduce a range of products under a local brand. Sales of locally produced vehicles will start in 2016.
“The launching of the Dongfeng Renault project symbolizes the start of a comprehensive cooperation between DFG and the Renault-Nissan Alliance. The project is a creative endeavor and practice in business model under economical globalization trends. It is a vital milestoneIt is a vital milestone for DFG's self-dependent development in opening process. We expect Dongfeng Renault will bring fascinating products and customer satisfactions for China auto market. We expect the success of Dongfeng Renault," said DFG chairman Xu Ping
“Dongfeng and Renault, as parent companies of DRAC, have been closely working together to ensure the future sucess of DRAC. Our partnership agreement is part of a long term strategy. The challenge is big and we are ready for it,” said Carlos Ghosn, Chairman and CEO of Renault