French auto giant Renault SA and China's largest car exporter, Chery Automobile Co., are in active talks to create a joint unit for the production and distribution of cars in South America. The potential alliance aims to strengthen the positions of both companies in key markets such as Colombia and Argentina.
According to information from Bloomberg, the cooperation includes the exploitation of Renault's existing production facilities in the region. Chery will play a key role by providing financing for the project and providing its engineering developments, while Renault will provide its established production and distribution infrastructure.
Renault's plant in Envigado, Colombia, is rumored to be used to produce cars with internal combustion engines. The majority of these cars will be sold under the Renault brand, and a smaller part – under the Chery brand.
At the same time, the Cordoba, Argentina, plant could start assembling plug-in hybrid pickup trucks, which will be distributed exclusively through Renault's dealer network. But in any case, the two companies consider their partnership to be extremely strategic for both countries:
For Chery: The Chinese company, which has been the largest car exporter since 2003, is looking to consolidate its position in new markets, especially in Latin America. Since the region has a strong demand for affordable cars with traditional engines, Chery's range is ideally suited to markets such as Argentina and Colombia. The company already has experience in joint ventures with Western brands, assembling Jaguar and Land Rover models in China.
For Renault: The French manufacturer will be able to reduce the costs of developing new models and adapt its cars more quickly to the requirements of the local market by using Chery's engineering solutions. The move will strengthen Renault's position in the region, where it competes with American and Asian manufacturers that are actively investing.
It is important to note that Renault already has an active partnership with another Chinese company - Geely, with which it jointly produces hybrid and electric models in Brazil. According to the sources, the new negotiations with Chery will not affect the existing alliance with Geely, but rather will become an additional strategic direction for the French company.
The negotiations are still at an early stage and a final decision is pending. Although representatives of Renault and Chery have so far refused to officially comment, this potential deal marks another stage in the global expansion of Chinese manufacturers and the restructuring of the global automotive landscape.