​Geely is a Chinese company known in the industry for buying Volvo and having a very influential and rich boss. Renault has established a company with Geely that will develop and manufacture engines and transmissions, and this company will also have ties with Dacia and Romania. Who is Geely? What were the connections between Dacia and China?

What Renault will do together with Geely

Renault has announced that it has entered into a framework agreement for the creation of a joint venture with the Chinese Geely, a company that will develop and manufacture thermal and hybrid engines, as well as transmissions.

It must be said that there is no indication that the factory in Mioveni will become subordinate to the new company known as Horse, so it would be wrong to say that Dacia will end up “in the hands of the Chinese”.

The new company, created by Renault and Geely, will be a supplier to many brands worldwide with a wide range of petrol, hybrid and hybrid engines, and Dacia is one of the eight customers mentioned. It is clear that there will be cooperation with Dacia, and it is expected that it will become closer over time.

“Once launched, the new company is expected to provide solutions to several industrial customers, including Renault, Dacia, Geely Auto, Volvo Cars, Lynk & Co, Proton, as well as Nissan and Mitsubishi Motors Company. In the future, this partnership can offer powertrain technologies to other brands as well,” the Renault group said.

• What does the future of Dacia look like in the vision of the head of Renault: cooperation with the Chinese, many larger cars, cost reduction

Renault says the new company, in which Geely will have a 50% stake, will operate 17 engine plants on three continents, employing a total of around 19,000 people. It will have a combined annual production capacity of more than 5 million internal combustion engines, hybrids, plug-in hybrids and transmissions and will be a supplier to 130 countries and territories. The turnover of this company is estimated at 15 billion euros in the first year.

• Renault “breaks” into five companies to become more profitable and will cooperate with the Chinese from Geely on thermal engines

The Renault company made the following statement: “In Romania, it is planned that the specialized enterprise for power units will remain Renault Mécanique Roumanie (RMR).

Renault and Geely have collaborated in China (signed in August 2021) for hybrid models, and are also linked in South Korea, as Geely bought 34% of Renault Korean Motors in May. The Renault-owned Samsung plant in South Korea will produce cars with thermal engines based on Volvo architecture from 2024.

The ties between Dacia and China are not new

The Dacia Spring, the brand’s first electric vehicle, is manufactured in China, but commercial ties between Dacia and China have existed for a long time.

In 1993, when the company lost many of its export markets, salvation came with the shipment of 4,400 cars to China on a cash-on-delivery basis, the late Constantine Straw, a man who contributed greatly to the company’s growth, said in 2009. brand from Mioveni He said there were 17 nightmare days in which he feared something would happen to the ship; with expensive but uninsured shipping.

Geely and its timid beginning

Geely was founded in 1986 and started with the production of refrigerators, and a few years later – decorative materials. In 1994, it started producing motorcycles, becoming one of the most important Chinese companies in this field. Car production only started in 1998, starting with the Charade Daihatsu, a Toyota brand specializing in the production of small class cars.

• Volvo ends up in the hands of the Chinese from Geely, who will pay Ford 1.8 billion dollars

Geely released models in China with no less interesting names, such as Beauty Leopard or Freedom Cruiser. In 2003, Geely began exporting cars, and in 2005, it became the first Chinese brand to participate in the Frankfurt Motor Show. In 2006, Geely also participated in the Detroit show for the first time, showing that it has global ambitions.

However, like other Chinese companies, Geely has not remained aloof from plagiarism scandals. In April 2009, the Chinese brought the GE model, a copy of the famous Rolls Royce Phantom, to the Shanghai Salon. The Chinese said they are “reinventing the classic model” but making it more accessible to more people as it will cost around £30,000.

The Geely brand was officially launched in Romania in April 2007 with two sedans: the CK, priced from €7,730 including VAT, and the MK, from approximately €10,400. Both then had Euro-3 engines.

Geely will return to the EU this year, but it has never had strong sales, with official EU figures showing it has never sold more than 400 cars under its own brand in a year.

Geely and its entry into the “higher league” thanks to Li Shufu

Geely became known to the whole world in March 2010, when it bought the Volvo brand, in which it now owns 82% of the shares. At the time, Volvo was part of Ford and was in a bad financial situation. Volvo has grown significantly under the Volvo umbrella, had an investment budget and an ambitious electrification plan. The Polestar brand, created in 2017, was also developed with money from Geely, a brand that recently received $1.6 billion in funding from two of its most important shareholders.

In 2017, Geely took control of the Lotus brand, a low-production but high-profile brand. The Chinese have promised to release an electric SUV and significantly increase annual production.

In 2018, Geely boss Li Shufu took another step by acquiring a 9.6% stake in Mercedes-Benz Group AG through a company called Tenaciou3 Prospect Investment Limited. In 2020, Mercedes and Geely also formed a joint venture to further develop Smart brand models to be manufactured in China.

In September 2022, Li Shufu took a 7.6% stake in Aston Martin and would like more, but other shareholders are against it. He became a shareholder in Terrafugia, a company that has been creating prototypes of “flying cars” for more than a decade.

According to Forbes, Li Shufu’s fortune is estimated at $17.5 billion, ranking 62nd in the world’s list of billionaires. The 59-year-old said he was so poor as a child that the only toys he had were sand cars.

In 2021, Geely Holding sold more than 2.2 million vehicles worldwide, of which 698,693 were Volvo Cars and 1,328,029 were Geely Auto Group, listed on the Hong Kong Stock Exchange. More than 120,000 employees work at Geely Holding.

Why Nissan is not happy that Geely is sitting at Renault’s “table”.

Negotiations between Renault and Geely would probably have been easier had it not been for Nissan’s concerns.

In recent weeks, the international press wrote that Nissan, a partner of the Renault alliance, is unhappy that the French will work closely with Geely. There are fears that Nissan technology could reach the Chinese, and the issue of technology transfer is complex.

Nissan wants to be sure its technology is protected, and it wants strong guarantees in that regard. There have already been disagreements between Nissan and Renault over how to deal with intellectual property.

The Geely issue has also hampered talks on the future of the Renault-Nissan alliance, with Renault boss Luca de Meo refusing to answer questions about the future of the alliance at a conference on Tuesday, saying he would do so when the conference takes place. and with Nissan bosses.

Renault owns 43% of Nissan, while Nissan owns 15% of Renault. Several international publications wrote that Renault’s share in Nissan will decrease, perhaps even to 15%.

The Carlos Ghosn scandal has “rocked” the alliance, with Nissan bosses saying the brand was not well represented even though it makes more cars than Renault.

The relationship has improved in recent years, but Renault bosses want Nissan to become a shareholder in the now established Ampere electric car division as part of a major shake-up.

Sources: Reuters, La Tribune. Le Figaro, Financial Times, Automotive News