Why Geely wants 34-percent stake in Renault Korea
Renault Korea Motors' headquarters in Busan / Renault Korea Motors
Chinese carmaker seeks to sell EVs in Korea
By Baek Byung-yeul
Stephane Deblaise, CEO of Renault Korea Motors / Courtesy of Renault Korea Motors
The acquisition of a stake in Renault Korea Motors, the Korean unit of Renault Group, by China's Geely Automobile Holdings, is being seen as a move to enter the domestic car market, according to industry officials, Wednesday.
On Tuesday, Renault Korea Motors announced Geely Automobile Holdings, the largest privately owned automotive group in China, will acquire a 34.02-percent stake in the company.
Currently, Renault Group owns 80.04 percent of its Korean unit while Samsung Card, an affiliate of Samsung Group, holds a 19.9-percent stake. With the acquisition, the Chinese carmaker will become the second-largest shareholder of Renault Korea.
“The company has been strengthening its partnership with Geely since January. And on Tuesday, Geely was confirmed to become the second-largest shareholder of Renault Korea,” a Renault Korea spokesman said.
“We've said that we will start producing eco-friendly hybrid cars in 2024 in partnership with Geely.”
Renault Korea will produce the hybrid cars at its Busan factory.
However, an official in the local car industry predicted that Geely bought the stake in Renault because of difficulties entering the global car market as a Chinese brand.
“Cars labeled 'Made in China' are not highly regarded in the global car market. It is possible to appeal to Chinese consumers, but it is hard for Chinese carmakers to overcome the high hurdles of the global car market,” the official said on condition of anonymity.
“But, Geely is highly recognized with its electric cars, such as Lynk & Co. So the Chinese brand plans to offer its eco-friendly car platform to Renault Korea and release cars in Korea under the Renault Korea brand,” the official said.
Geely has been actively trying to expand its presence in the global market. The company owns Volvo Cars and holds a 9.7-percent stake in Daimler AG.
“As the reliability of cars labeled 'Made in China' is still low in the international market, Geely is likely to seek expansion into the international market in addition to the Korean market,” the official said.