Renault and Chery Explore South American Automotive Partnership

Renault SA (EPA:RENA) and China’s Chery Automobile (HK:9973) are in advanced discussions over a potential strategic partnership to expand their presence in South America, according to a Bloomberg report citing sources familiar with the matter. The negotiations focus on Colombia and Argentina, two key markets where both automakers see significant growth opportunities.

The proposed deal would give Chery access to Renault’s established manufacturing facilities in exchange for financial investment and support in vehicle design. In Colombia, Chery is considering utilizing Renault’s Envigado plant to produce combustion-engine vehicles. These models would primarily be sold under the Renault brand, strengthening Renault’s local footprint while helping Chery enter the market with reduced barriers.

Meanwhile, in Argentina, discussions are centered on Chery potentially investing in the production of a plug-in hybrid pickup truck at Renault’s Córdoba factory. This move would align with the growing demand for hybrid and eco-friendly vehicles in the region. Under the arrangement, Renault would also serve as the distributor, leveraging its established sales and service network to drive market penetration.

The talks reportedly began under the leadership of former Renault CEO Luca de Meo and remain ongoing. However, insiders caution that negotiations may not necessarily lead to a finalized agreement. If successful, the collaboration could mark a significant shift in South America’s automotive landscape, allowing both companies to pool resources and respond more effectively to shifting consumer demand and stricter emissions regulations.

This potential Renault-Chery alliance highlights the increasing trend of global carmakers partnering to share technology, reduce production costs, and accelerate entry into emerging markets. While the outcome remains uncertain, the discussions underscore the strategic importance of Latin America in the long-term growth strategies of both Renault and Chery.