Dongfeng Motor may team up with Renault

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Last updated at: (Beijing Time) Friday, March 05, 2004

Dongfeng Motor may team up with Renault

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The chief of Dongfeng Motor, Nissan's joint venture with Chinese State-owned Dongfeng Motor Corp., said Wednesday he was open to cooperating in China with Nissan's French partner, Renault, but there were no talks as yet.

Katsumi Nakamura said Renault could already be talking directly to the joint venture partner, Dongfeng Motor Corp., though he did not know for sure, but the French company had not approached his joint venture itself.

"We are not currently in talks with Renault. But if they would like to cooperate with us, and if that is good for ourcompany, then why not��" Nakamura told Reuters in an interview atthe Geneva car show. "We have so far had no such request."

Renault, which is due to announce its strategy for enteringthe fast-growing Chinese market next month, has said it is intalks to form a joint venture with Dongfeng Motor Corp., which also makes cars with its French rival PSA Peugeot Citroen and Japan's Honda.

The French firm, which owns 44 percent of Nissan, has also said it would probably take advantage of its Japanese partner's presence in China, but has not said how closely it would work with Nissan's joint venture.

Nakamura said he would be open to a deal with Renault thatcould involve selling the French cars in its dealerships orsharing parts and even factories locally if it also made goodbusiness sense for the Dongfeng venture.

Renault already shares parts, platforms and purchasingsystems with Nissan to improve efficiency and save money, andthe two companies will share a chief executive -- industry golden boy Carlos Ghosn -- from next year.

Nakamura reiterated the joint venture's aim of quadruplingits sales of trucks and cars in China by 2007 and swelling its operating margin to 10 percent from eight percent currently.

That would give Dongfeng Motor a three percent share of the passenger car market, which Nakamura expects to keep growing inthe next four years, albeit at a slower pace.

"We expect double-digit growth until 2008," he said, notinglofty prices in the world's most populous nation were alreadystarting to fall as the world's carmakers scrambled to cash inon a fast-growing middle class there.

He declined to comment on plans by Dongfeng Motor Corp, the parent company, to raise US$1 billion via a Hong Kong IPO this year.

Nakamura said it did not bother him that the Dongfeng parent also had deals with carmakers other than Nissan, arguing it meant the firm had more to offer motorists.

Source: China Daily

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