Renault is ready to open its internal combustion engine business to Chinese Geely and Saudi Aramco

Renault is ready to open its internal combustion engine business to Chinese Geely and Saudi Aramco

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The Renault engine plant in Cléon (Seine-Maritime), in June 2017.

Renault is rapidly reorganizing to find the means to tackle the electric revolution, while securing a future for its petrol or diesel engine factories. The group is in talks to bring two new partners into the capital of a company that oversees its development and production activities for thermal and hybrid engines.

This entity, whose code name is “Horse” (“horse”, in English), could have as a shareholder the Chinese automaker Geely but also an oil group, as revealed on Tuesday, August 30, by the Reuters agency. According to our information, this is the Saudi company Aramco, with which Renault could work on post-oil and synthetic fuels.

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It is the armed wing of Saudi Arabia that would become a partner of Renault. The national oil company, listed on the stock market in December 2019, has a market capitalization of 2.2 billion euros. This makes it the most valuable company in the world, side by side with Apple.

As for the Geely group (Lotus, Proton or Lynk & Co brands), it already bought, in May, 34% of the South Korean subsidiary of Renault. The first independent Chinese manufacturer has been the majority owner, since 2010, of the Swedish Volvo, with which it has grouped its combustion engine activities, while giving it the means to create Polestar, a new 100% electric brand.

Share the costs

If the operation comes to an end, Renault would only be a minority shareholder in its historic business, which would be carried out outside of France. The manufacturer has always said that it would, however, remain “reference shareholder”. Renault and Geely could each have 40% of the company’s capital for thermal engines, according to information from Reuters, and Aramco 20%, but the distribution “it has not yet been finalized at all, and talks are still ongoing with other partners”specifies an actor, who wishes to remain anonymous.

According to a Renault press release, in May Horse will bring together the factories of Valladolid and Seville in Spain, Cacia in Portugal, Pitesti in Romania, Curitiba in Brazil, Los Andes in Chile and Córdoba in Argentina, but also engineering and research centers. and development in Spain, Romania, Turkey and Brazil. The integration of the Turkish factory in Bursa in this group is pending. A total of 10,000 people (of the 110,000 Renault employees worldwide) would move to Horse in 2023, but there are no French employees.

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