French automaker Renault and its Chinese partner Geely are set to announce a deal this month to expand their cooperation to Brazil. According to sources familiar with the matter, the companies, known for creating a thermal engine last year and jointly selling cars produced in South Korea, aim to leverage Renault's Brazilian retail network for selling Geely-branded vehicles exported from China.
The proposed deal involves Geely acquiring a minority stake in Renault Brazil and using its Curitiba plant for vehicle assembly. While details of the investment remain undisclosed, the arrangement would not only enhance Renault's presence in Brazil, its fifth largest overseas market, but also support Geely's endeavor to diversify its market reach beyond Europe amid trade challenges and tariffs on China-made vehicles.
This move aligns with Geely's strategy to tap into growth markets like Brazil and reinforces Renault's broader objective of reducing dependency on the European market. The decision also reflects a trend among Chinese automakers to explore export opportunities in regions such as Russia, South America, the Middle East, and Africa in response to trade tensions and overcapacity issues in China's domestic market.
Furthermore, the collaboration in Brazil presents an opportunity for Geely to introduce its own brand in the country, contrasting with the existing partnership in Korea, which focuses on a Renault-branded model manufactured in a jointly owned facility. Plans for Geely to potentially use Renault's Brazilian plant for manufacturing gasoline, hybrid, and electric vehicles are being discussed, indicating a move towards a diverse product lineup in the region.