Renault in talks to end Chinese van venture with Brilliance - source

Brilliance China Automotive Holdings

09/09/2021 08:27

By Yilei Sun and Sarah White
    BEIJING/PARIS, Sept 9 (Reuters) - Renault  RENA.PA  is in
advanced discussions to end its joint venture to build vans with
China's state-backed Brilliance  1114.HK , a source close to the
matter said, as the French firm overhauls its struggling Chinese
operations. 
    The tie-up dates back to 2017, when Renault and Brilliance
China Automotive Holdings Ltd set up manufacturing operations in
Shenyang, the provincial capital of Liaoning, and set out to
make a push into electric commercial vans in particular. 
    The Chinese market has proved difficult for some foreign
producers, however, with sales faltering right before the
COVID-19 pandemic, which walloped the industry.
    Renault last year ditched its main passenger car business in
China following poor sales at its loss-making venture with
Dongfeng Motor Group  0489.HK . But it is making a fresh attempt
to crack the market with Geely Holding Group, announcing in
August a hybrid vehicle joint venture.  urn:newsml:reuters.com:*:nL1N2PG02N
    Renault said in a statement its joint venture with
Brilliance was still beset by challenges despite a
transformation plan set out in June 2020, but declined to
comment on its possible end.
    "We do not comment on market speculation," it said. "The two
shareholders have brought a lot of support (to the venture) and
are in regular contact about the development of the group."
    Brilliance had no immediate comment. 
    Brilliance's parent Huachen Group has defaulted on billions
of yuan in debt obligations. Chinese regulators have launched an
investigation into possible violations of disclosure laws by the
company.  urn:newsml:reuters.com:*:nL4N2I43Q1
    France's Les Echos newspaper, which reported the possible
end of the tie-up, said the matter would be discussed at a board
meeting of the joint venture this month.
    Brilliance had not promised future investments in the joint
venture for new models, the source close to the matter said,
adding to Renault's doubts about the operation. 

 (Reporting by Yilei Sun in Beijing and Sarah White in Paris
Editing by Keith Weir and Mark Potter)
 ((sarah.white1@thomsonreuters.com; + 33 (0) 1 49 49 56 85;))