Here’s a possible rule of thumb to know when foreign companies might be cracking a market in China: state TV starts accusing them of ripping off local customers. This week’s target was carmakers.
On that measure, it is hard to say whether Renault’s $1.3bn, 50-50 joint venture with Dongfeng – which was formally approved this week – might be coming to the party too late or just in time. The deal gives the French carmaker its first manufacturing base in China. The 30,000 vehicles it sold in the country last year are a drop in the ocean of the millions of Chinese drivers. But production at the venture’s 150,000-vehicle-capacity plant may take a couple of years to get into gear.
Shares in Renault have had a long time to price in the JV. Renault’s 44 per cent stake in Nissan (already a long-time partner with Dongfeng) is just as important here: the alliance promises scale in China.