Groupe Renault and Brilliance China Automotive Holdings Limited (CBA) today announce that they have signed a binding framework cooperation agreement covering the main principles of the formation and operation of a joint venture (JV) in China focusing on the manufacturing and sale of light commercial vehicles (LCV).
To facilitate the formation of the JV, CBA will acquire a 100% holding in Shenyang Brilliance JinBei Automobile Co., Ltd. (SBJ), a leader in the Chinese LCV market with a strong network and market presence throughout China, after which Groupe Renault will purchase from CBA a 49% equity interest in SBJ resulting in a restructured joint venture company held by CBA (51%) and Groupe Renault (49%).
“As a top global automotive company, Groupe Renault is entering into a promising and high potential Chinese LCV market which accounts for upwards of 3 million vehicles per year. By joining hands with CBA, Groupe Renault aims to become a major LCV player in China. We will bring our management expertise and know-how on the products and technology.” said Carlos Ghosn, Chairman and CEO of Renault.
“ Brilliance, as a historical top Chinese player in the LCV market through its brand JinBei, is conjoining with Renault LCV and bringing to the joint venture its own expertise in the Chinese LCV market with manufacturing facilities, engineering resources and distribution network. With the strong support of various government authorities, we see this venture to be fully operational in the near future to fulfill Chinese customers and shareholders.” said Mr. Qi Yumin, Chairman of Huachen, major shareholder of CBA.
“With our strong experience of operating automotive businesses with industry partners, we expect our new joint venture to upraise our existing minibus operations while developing new growth opportunities for both the JinBei and Renault LCV businesses and become a significant player in the Chinese market.” declared Mr. Wu Xiao An, Chairman of CBA.
Beyond the existing JinBei vehicles, the joint venture will also develop, manufacture and distribute new vehicles and services under both the JinBei and Renault brands.
The transaction remains subject to customary regulatory approvals in the PRC and Hong Kong and is subject to CBA shareholders’ approval.