Great Wall Motor Denies JV with Renault

Renault Truck

An overseas marketing vice general manager of Great Wall Motor Co., Ltd. (SEHK: 2333) denied the saying that the Chinese automaker would set up a joint-venture factory with the French auto titan Renault in Venezuela.

Earlier reports said that in mid-June 2009, Great Wall Motor signed a letter of intent with Renault about their joint-venture production in Venezuela.

Both sides would manufacture vehicles in a factory, which belongs to a local partner of the Chinese automaker, they added. The factory, with a designed yearly production capacity of 22,000 vehicles, would produce 15,000 vehicles for Renault and the remaining for Great Wall Motor a year, they continued.

The reports even said that Renault would build Logan, one of its car models, and Sandero, one of its hatchback products, in the factory, with some parts imported from Colombia. The French auto titan has manufactured Logan cars in Colombia for four years.

If the joint-venture plan comes true, the French auto titan would invest USD 10 million and the Chinese automaker would contribute USD 65 million, they predicted.

The vice general manager of the Chinese automaker explained that Renault would not cooperation with Great Wall Motor, but a Venezuela-based dealer of Great Wall Motor.

Its local dealer had planned to build a factory, with an annual production capacity of 22,000 to 25,000 vehicles, to manufacture Great Wall-branded products in the form of knock down (KD), said the vice general manager.

Later, Renault went to the dealer and hoped that the dealer could also assemble Renault-branded vehicles. Both sides signed an agreement, and in the future, both Great Wall-branded and Renault-branded products will be assembled in the factory, he disclosed. But Great Wall Motor itself has had no plan to set up a joint venture with Renault or join hands with it, he stressed.

Notably, in March 2009, Great Wall Motor President Wang Fengying told that the US auto giant Chrysler LLC terminated the cooperation negotiations with her company.

Analysts said that the termination resulted from the tie-up of the US auto giant and Italy's Fiat. But the Chinese automaker denies the saying, stressing that Chrysler and Fiat had just signed a nonbinding agreement.

The president said that Great Wall Motor would pay the most attention to the development of its proprietary brands, and that it had not contacted any partner yet.

The automaker sold 125,000 vehicles in 2008, including 55,000 ones for export and falling far behind the goal of 200,000 ones. This year, it will release 13 new products and reach the 200,000-vehicle goal.

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