As it turns out, French car manufacturer Renault has been forced to end its joint venture with China's Dongfeng according to several published reports.
This divorce may come as a surprise to many people given that China - a country filled with people who are thought to love everything French - is the most populous country in the world with arguably the most drivers. How come it was so difficult to sell cars in such an environment?
But it turns out that Renault is losing big money in China. The cars just aren't selling in that market. They sold fewer than 20,000 cars in 2019 according to reports and this simply will not cut the muster so they are pulling out. A part of the problem would be the Covid19 pandemic but it also could be other factors.
Already, Renault has had to cut dividends to shareholders and also cut salaries of top execs to stem the losses they are experiencing. But it was not enough to save the joint venture and so they have decided to shutter it.
Their 50 percent stake in teh company will be acquired by Dongfeng and the rest is history. But the company will continue to manufacture electric cars with another joint venture partner in the region.
SOURCES
https://www.marketwatch.com/story/renault-exits-dongfeng-jv-halts-china-car-sales-2020-04-14
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