Renault opens plant in Hubei province to produce Kadjar SUV

Dongfeng Renault's first product Kadjar sport utility vehicle is pictured  at the plant opening ceremony in Wuhan, Hubei province, on Feb 1, 2016. [Photo provided to chinadaily.com.cn]

Renault began production on its compact Kadjar sport utility vehicle this month in Wuhan, capital of Hubei province, after more than a decade of selling its imported cars in China.

The facility in Central China also produces engine parts for the Kadjar and is the Renault Group's first engine parts plant outside Europe. The automaker's joint venture with the Dongfeng Motor Corp, called Dongfeng Renault Automotive Co, began construction on the 95-square-kilometer plant at the Wuhan Economic Development Zone in January 2014.

Carlos Ghosn, chairman and CEO of the Renault Group, said the opening of the new plant is "a milestone in our long-term partnership with Dongfeng Group and a major step for the Renault Group's global growth".

At a snowy ceremony on Feb 1 to celebrate the opening of the plant, he said, "China is a core part of Renault's strategy. The plant was built in record time and meets all quality standards. We are very confident in the development of Dongfeng Renault".

The facility includes a vehicle assembly plant, a powertrain plant and a research and development center "to adapt our products to our customers' requirements", the company said.

The plant, backed by 7.76 billion yuan ($1.2 billion) in investment, will produce 150,000 vehicles annually, though the company said the manufacturing base could double that to 300,000 units annually in the future.

Dongfeng Renault Executive Vice-President Hu Xindong hinted that the plant could also produce a full-size SUV, though he didn't elaborate.

In his speech at the ceremony, Dongfeng Motor Corp Chairman Zhu Yanfeng said the joint venture "will be the new engine of the group's growth over the next five years".

Dongfeng and Renault established their 50-50 joint venture in February 2014. By the end of the last year, the joint venture's number of employees totaled 2,000.

The locally manufactured Kadjar will hit the market in March. Chinese actress Fan Bingbing unveiled the model at the 13th China (Guangzhou) International Automobile Exhibition in November 2015.

The amenities in the Chinese version of the Kadjar are slightly different from the European version, released on the continent last year. The Chinese version includes a panoramic sunroof, 4Control and independent rear suspension.

Renault sold 15,850 vehicles last year on the Chinese mainland, down 50 percent from 2014. Current sales come largely from the imported SUV Koleos.

But SUVs continued to be the mainstay of the auto industry, accounting for 25.2 percent of total auto sales last year. Sales of SUVs reached 6.2 million units in 2015, a 52.4 percent growth over 2014.

Ambitious target

Ghosn said he is aiming for a 3 percent share of the Chinese market, similar to Renault's global market share, and expects the Chinese market to grow by 5 percent this year.