SEOUL (Reuters) – Renault Chief Executive Luca De Meo said on Tuesday he was in talks with the French government on his strategy to attract partners to his future internal combustion engine unit, which he intends to create alongside a new electrical entity.
Renault and Nissan have initiated discussions on the future of their alliance in parallel with the French group’s entity project. After several days in Japan, Luca de Meo was in Korea where Renault restructured its vehicle offer with the assistance of the Chinese Geely, now a 34% shareholder in Renault Korea Motors.7201.t>
“It’s the kind of sector or industry where you have to scale to find synergies,” Luca de Meo told reporters in Seoul. “It’s a project that’s there to take our combustion engine cars into the future. We need a partner to do that, and that’s what we’re doing.”
The general manager of Renault answered a question on the ongoing discussions with Geely Automobile after a visit to the Busan plant, operated since the beginning of the year in joint venture with the Chinese group.
Renault announced on this subject an investment of more than 900 million euros over six years to strengthen its activities in South Korea, one of the pillars of the “Renaulution” plan internationally.
The diamond group will launch a whole new range of large hybrid vehicles under the new Renault Korea Motors (RKM) brand based on the latest Geely-Volvo technologies for the local market and export from 2024.
Regarding the discussions with the French government, Luca de Meo indicated that it was not a question of asking for authorization. “This is just an ongoing conversation, which continues, (on) different topics that we have with our major shareholder.”
The French State, which holds 15% of Renault’s capital, supports the group’s strategy aimed at improving its image in the electric sector via a dedicated entity based in France, and welcoming partners into another entity dedicated to internal combustion engines based abroad.
Renault intends to remain the majority shareholder of its electrical entity, where its historical partner Nissan could invest, but only a reference minority shareholder in the other entity. According to sources familiar with the matter, Geely, owner of Volvo Cars and 9.7% shareholder of Mercedes Benz Group, is discussing with Renault a significant stake, or even control, in the thermal entity.
Geely was not immediately available for comment.
Such a scenario will have to obtain the approval of Nissan if technologies developed by the Japanese group are concerned. A particularly delicate job because Renault, Nissan and Mitsubishi plan to use an architecture developed jointly for 80% of their 90 models by 2026.
(Heekyong Yang and Joyce Lee, with Gilles Guillaume in Paris, editing by Nicolas Delame)