The last to arrive were the French. First Peugeot, now Renault. All landed in Wuhan, a megalopolis of 10 million inhabitants, on the banks of the Blue River, in central China. The name is little known by European and US citizens. But it is quite popular among car manufacturers of all latitudes, so much so that it has earned the title of "Detroit of the Far East". Bankruptcy excluded, of course.
Today it's up to Renault, which has signed a joint venture with the state giant Dongfeng Motor Group, based in Wuhan. The deal had been in the air for 9 years. There is now a $50 billion 1,3/XNUMX partnership to bring the French automaker's models assembled in the People's Republic to the Chinese market – the largest in the world.
The pact allows Renault to fully satisfy Chinese demand, something it had not been able to do until now due to the lack of a strong local partner, a figure which - among other things - is a basic requirement for foreign manufacturers who decide to build cars in China. Before, the French sold to Beijing by importing from South Korea.
In the immediate future, with Dongfeng, they will invest $1,28 billion to set up a plant in Wuhan. The goal is to get the first car out of the factory in 2016. The French, long allied with the Japanese Nissan, intend to produce 150 cars a year there and create a network of points of sale in the country.
It all takes place 700 kilometers from Shanghai, in the city where Dongfend, China's second largest car manufacturer, is based. Wuhan's local authorities are ambitious: they want to attract investment from foreign manufacturers and their Chinese partners to open factories and outlets, making the area the largest automotive center in the People's Republic and beating competition from two other centers: Chengdu and Shenyang . An increasingly concrete ambition, in a megalopolis which – assures those who have been there – looks like an enormous ball of dust due to the frenzied construction activity.
Thanks to its central location and network of railways, highways and waterways, Wuha is a candidate to become "China's Detroit, but without bankruptcy," Peng Zhimin, an economics researcher at the Chinese Academy of Social Sciences, told Reuters. local government consultant. Peng sees Wuhan as a hybrid between Detroit, the home of the American auto industry, and Chicago, the North American transportation hub par excellence.
In addition to Renault, there are also Nissan, Honda and PSA Peugeot Citroen in Wuhan. All joint ventures with Dongfeng. Already today, the city produces around 1 million vehicles a year. The goal is to reach 3 million by 2016, thanks above all to the French car manufacturers Renault and Peugeot. The latter, among other things, would be about to obtain a significant liquidity injection from Dongfeng.
General Motors and its Chinese partner SAIC Motor Group had already arrived in Wuhan. Earlier this year, the companies had begun building a 300-per-year assembly plant and another engine factory. Production should start in 2015 and the goal is to double production thanks to another assembly line.
