Renault to Launch Chinese Venture with Dongfeng

Renault SA is close to forming a 7.2 billion-yuan (€860 billion) carmaking joint venture with Dongfeng Motor Group Co. in Wuhan, China, according to a government Web site.

The Environmental Protection Bureau of Hubei province, where Wuhan is located, also says the venture will have annual capacity of 150,000 passenger vehicles.

After years of talks, the two companies signed a memorandum of understanding last April for the venture. A Wuhan city official tells China Business News that the partners are scheduled to break ground for the plant in May.

Analysts predict the companies will begin by producing Renault's Koleos compact crossover vehicle.

Renault is one of the last major automakers without an assembly plant in China. The company sold 29,700 vehicles there last year.

Dongfeng already makes SUVs in China at a joint venture with Renault's alliance partner Nissan Motor Co.