Renault coming to China with electric vehicles

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Carlos Ghosn knows that the writing is on the wall, if you want to succeed you have to enter China but getting into China is a whole different story in 2012. When the French car maker initially entered China as the partner to San Jiang Motors in the late 1990′s entry into the Chinese market was an easy affair, you just had to put the money on the table, tell the government how many employees you needed and the government would reply with how many employees you really wanted and production began. In 2012, the market is a crowded place, sales are tanking and some manufacturers are starting to realize the perils of over expanding their production capacity, so can Renault enter China? Their has been an increased flutter in rumors in late 2011 and early 2012 that Renault will call Wuhan their production base in China later this year when they sign a joint venture partnership with Dongfeng Auto, Reuters are reporting that Renault will have a stronger focus on electric vehicles and luxury vehicles to get into and ahead in China:

French auto giant Renault is planning to produce electric cars in China and sell more luxury vehicles in the world’s biggest auto market, chief executive Carlos Ghosn said Thursday.

“The Chinese government said recently that it is not possible to increase capacities or set up in China without bringing certain innovations,” noted Ghosn during a conference with analysts on the group’s annual earnings.

“We know that we need to bring the electric vehicle to China,” he said, adding that this could be done through the Renault brand or another marque.

Renault said earlier Thursday its 2011 net profit reached 2.09 billion euros. However, it sold just 24,000 cars in China, a tiny fraction of the 2.72 million vehicles sold across the globe in 2011.

Beside green cars, the automaker is eyeing more luxury car sales in China as it moves to renew its fleet from 2014.

“Our high end line will go to China,” said Ghosn.

Chinese media has speculated that the French group could set up production in central China’s Wuhan, where homegrown carmaker Dongfeng has a factory.

Dongfeng is already working with Nissan, which is controlled by Renault.

Foreign companies are required to have a local partner in order to produce in China.

“I prefer not to talk about the Chinese project until I have an agreement with the Chinese authorities,” said Ghosn.

Renault’s current China range is 100% imported, either from Europe or from its Korean partner at Samsung where certain models, such as the popular Koleos SUV are made and imported into China. Ghosn rightly states that entering China at such a late stage will require some electric palm greasing if they are to gain market entry, so sharing its electric technology with Dongfeng maybe the only way in, plus Renault may finally find a country where it can sell its high end products.