Exclusive: Renault, Geely expect to finalise combustion engines joint venture deal at the end of February – sources

PARIS, (Reuters) – French carmaker Renault and Chinese rival Geely expect to finalise a deal on their planned combustion and hybrid engines joint venture towards the end of February, two sources close to the matter told Reuters.

At the same time, Saudi Aramaco is set to announce the signing of a memorandum of understanding to invest in the joint venture, one of the sources said, a move which would confirm Aramco’s letter of intent from March last year.

Renault’s unit Horse and Geely could end up with 40% of the joint venture each, with the remaining 20% going to Aramco, the source added. The discussions on the precise investment of the Saudi group are, however, still ongoing.

In July last year, Renault and Geely had said the joint venture would be split 50-50 between the two, with Geely’s stake shared between its subsidiaries – 33% for Aurobay and 17% for GHPT.

“The projects advance as planned, we will communicate in due time,” a spokesperson for Renault said, while a spokesperson at Geely Europe refused to give any details on the deal’s timing. Aramco said it could not immediately provide a comment.

The joint venture will aim for 15 billion euros in annual turnover and employ 19,000 people on 22 sites around the world – mainly in Spain, Romania, Turkey, South America and China.

It will constitute one of the two main pillars of Renault’s strategy to stay in the race against larger competitors by signing multiple partnerships to reduce costs and access new markets.

This plan was eclipsed recently by Renault’s creation of a unit dedicated to electric vehicles (EV), Ampere, and the abrupt cancelling of the IPO plan for the unit, the company citing unfavorable market conditions as the reason.

Renault will publish its full 2023 results on Thursday.

Reporting by Gilles Guillaume, writing by Piotr Lipinski, editing by Ingrid Melander