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Deals that make the world go round
Page 20
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Oliver Dixon asks how the new alliance between Renault and Dongfeng will affect European truck makers.
The much-discussed joint venture between Renault VI (RVI) and Chinese manufacturer Dongfeng Motor is likely to bear its first fruit in October. Production will centre on the Kerax and Premium, but Dongfeng branded vehicles will also roll off the Liuzhou line in Guangxi Zhuang.
Renault will hold a 32% stake in the joint venture, with Dongfeng controlling 27%. The existing company of Dongfeng Nissan Motor will hold a 36% share.
Output is expected to reach 47,000 trucks a year by 2010, with RVI badged products accounting for 7,000. RVI expects to produce 1,000 vehicles in the first year.
A recent edition of the China Daily said: "The truck joint venture is part of Renault's efforts to revive its production and build threeparty synergies with Dongfeng and Nissan in China." These synergies will doubtless include a transfer of European technology, which will benefit Dongfeng and Nissan in equal measure. Sources in Europe and Japan have pointed to a persistent rumour suggesting that Volvo is talking to Nissan about marketing the Japanese giant's range of light trucks through its European dealer network. Nissan is already dealing with another European manufacturer, and is taking sub-chassis components from Europe for vehicles destined for Japanese operators.
For the record, Volvo denies any such deal, but it would have a certain elegance. While the Volvo group has a 7.5-tonner in the range courtesy of RVI, it is not well represented in the important retail distribution market. Remarketing a Nissan-badged vehicle to nonspecialist transport buyers could open up a valuable revenue stream for Volvo's European network.
And, with Renault SA owning 14% of Nissan, as well as a chunk of Volvo Renault, the relationship cannot be said to be a new one.
It might seem a quantum leap from China to Europe, but the fact remains that the Chinese market is beginning to cool, and there is still resistance within the Japanese market to product sourced from China. However, there does appear to be a lot of spare capacity within the Liuzhou plant, and it is not impossible that that capacity could be devoted to CKD kits for export to Europe.
Silly season inevitably encourages speculation, but Volvo's pursuit of common platform, coupled with the low cost of labour in China. and Nissan's good reputation among the likely target markets for its trucks, does seem to be a compelling argument.
With Scania and Hino believed to be close to formalising their relationship, and Tata believed to be ready to target the European market in 2006. the CV landscape looks set for another round of changes. •