Renault sells a third of its Korean division to Geely for 196 million

Led by Luca de Meo, the consortium is examining monetization options. investing in the transformation of their brands and compensating for the decline in revenues After his exhibition in Russia. In fact, the move comes just weeks after Renault learned it was trying to cut its stake in Nissan, and confirmed from Russia that the diamond firm would sell its majority stake in Lada’s maker AutoVAZ. a Russian public company for one ruble, one euro cent. Luca de Meo announced on Monday that they will soon decide what to do with their business in Russia, their second most important market.

Renault’s purpose repositioning their brands in the market by focusing on added value To match Renault with brands like Volkswagen or Ford, it sells each unit rather than volume, making more profit for each unit sold. The group is on track to reach 5% by 2025, aiming to reach an operating margin of 3% across all brands by 2022.

a strategic move

The French company has been selling cars in South Korea for over 20 years, but its recent business performance fell short of the group’s expectations. in 2021 Registrations dropped 36% Up to 57,480 units. The South Korean market, dominated by Hyundai-Kia with a 49% market share in 2020, is one of the most challenging markets in the world. brands own Genesis.

The sale of 34.02% of Renault Korea Motors, however, does not mean that the manufacturer loses control, as Group Renault will continue to own 45.99% of the division and Samsung will hold the remaining 19.9%. Declaring that he wants to sell all his shares in December, Card. If Geely wants full control, it can buy this stock for approx. 70 million more euros.

The acquisition of these shares allows Geely to enter the South Korean market in a strategic move that brings the Chinese company closer to LG Energy Solution, SK Innovation and Samsung SDI, three of the world’s largest battery manufacturers. It should be noted that Geely manufactures electric vehicles for brands such as Polestar or Smart, among others, and will increase its production volume, so it must ensure the supply of batteries for the future. The two companies partnered in January to develop hybrid cars for the South Korean market, which will be produced at Renault’s plant in Busan.

Geely, an auto giant

With this acquisition, Geely adds another asset to its automotive business portfolio to consolidate itself as one of the largest groups in the industry. The Chinese consortium is the majority shareholder of Mercedes-Benz AG -Mercedes-Benz and the new Smart- with 9.7%, and owns the Volvo Group and its brands Volvo, Polestar and Link & Co., Lotus Group and London Electric Vehicle Company. produces electric taxis and commercial vehicles.

In parallel, it sells cars in China with the Geely Auto brand and electric car manufacturer Geometry, and in Malaysia with Proton, the country’s best-selling company acquired in 2017. Geely also manufactures commercial vehicles under the names Farizon Auto and Ouling Auto. brands.. Added to all these brands Others dedicated to the development of technology and engines for automotive. In total, in 2021 the entire Geely group sold 1.36 million units across all its brands, 1% more than in 2020.