After years of withdrawing from the Chinese market, Renault is now back to stir up trouble.

Recently, media reported that the Renault Group has established a team of dozens of people in Shanghai since the first half of this year, responsible for the restyling project of an electric vehicle model. This team is affiliated with Renault China's Shanghai branch but reports directly to Renault's French headquarters, without a substantive reporting relationship with Renault China.

Developed in China, sold in Europe

Currently, China is a leader in the global automotive industry's transition to electrification and intelligence. Although the domestic market competition in China is fierce, technological and business model innovations are very active, providing strong reference significance for multinational automakers. If a company can succeed in the Chinese market, other markets will naturally follow.

According to insiders, Renault has now placed the research and development of an electric vehicle model in Shanghai. This is the first time Renault has placed the research and development of a new vehicle in China. The project's mass production (SOP) timeline is set for the end of 2025, but this is not a signal that Renault is returning to the Chinese market.

According to Renault's plan, the vehicle will not be produced in China and has no immediate plans to be launched in China. Both manufacturing and sales will take place in Europe.

Renault hopes that through the development of this vehicle, it can access China's supply chain system and initially establish a research and development team in China. Currently, Renault is also recruiting a software team in China, and China's research and development and supply systems may gradually become the core of Renault's electric vehicle layout in the future.

A person close to Renault China said that the newly formed research and development team belongs to Renault's wholly-owned subsidiary Ampère and reports to Renault France; the company that outsourced the overall project is Shanghai Longchuang Automobile Design Co., Ltd. (hereinafter referred to as "Longchuang"). In the battery supplier system, Renault has already reached a cooperation with Contemporary Amperex Technology Co. Limited (CATL).

It is reported that Longchuang is one of the earliest independent automotive design companies established in China and has participated in the design of products from automakers such as Peugeot, Ford, Citroen, and Vinfast. Therefore, Renault's future designs will also have a familiar French flavor, mainly targeting the European market.

Not long ago, Renault also issued a statement stating that to accelerate the development of electric vehicles, Ampère, with the help of the research and development team established by the Renault Group in China, the "Advanced China Development Center," will closely cooperate with Chinese partners. The establishment of this team aims to promote the future development of Ampère and the Renault Group by integrating and learning from China's electric ecosystem during the development stage.

Renault officials stated that the development of the Twingo model, announced a year ago, is currently progressing as planned and is expected to enter mass production and be launched in 2026. The entire development cycle is less than two years, with a target price below 20,000 euros.

Renault, afraid to set foot in the Chinese market, cuts corners

Renault has established several joint ventures in China, mainly including Brilliance Renault, Dongfeng Renault, and JMC Group New Energy, but their sales have always been at the fringes of the market.

Among them, Dongfeng Renault, the most important one, launched Koleos and Kadjar in the SUV market. However, due to the marketing and products not keeping up with the pace of the domestic automotive market, it has never Squeeze in the mainstream market for mainstream passenger vehicles. The joint venture company has gradually declined. After Su Weiming took over as CEO of Renault China, the strategic focus of Renault China also shifted from seeking market share to asset-light operations.

Renault insiders revealed that Renault is temporarily uninterested in participating in the increasingly fierce competition in China's new energy vehicle market and hopes to simply transfer the research and development and supply chain of electric vehicles to China. The primary goal is still Europe and other overseas markets.

This is also a wise choice.

In the previous era of fuel vehicles, we could see that Renault did not have a deep understanding of the Chinese market. Compared to domestic and other joint venture brands, its products did not have impressive memory points. Coupled with the lag in product and marketing rhythm, Renault has become a nominal joint venture brand.

In today's era of electrification, consumers are quicker to abandon old products for new ones. Automakers need sufficient research and development funds and technical reserves to compete in the intense market and gain sales. Obviously, Renault does not possess these two aspects. Establishing a research and development team in China is also to prepare for seizing the European market in advance.

In the European market, China's new energy vehicles pose a threat to Renault. Especially, small cars are the core of Renault's passenger car market. For example, the well-known European hatchback Clio is from the Renault brand.

Recently, the European Union announced the final ruling of the anti-subsidy investigation on Chinese electric vehicles and decided to impose a five-year anti-subsidy tax on electric vehicles imported from China. The EU has increased the import tariff on electric vehicles made in China to a maximum of 45.3%, but both China and the EU are still in negotiations, hoping to reach a price undertaking (i.e., a minimum price undertaking for imported vehicles) agreement to avoid tariffs.

Renault chose to develop electric vehicles in the Chinese market at a time when the EU is increasing taxes but plans to produce and sell them in Europe, aiming to quickly seize the European market during this brief window period.

Official data shows that in the first half of 2024, the Renault Group sold a total of 1.155 million new vehicles globally, a year-on-year increase of 1.9%; total sales in the European market reached 847,000 units, accounting for more than three-quarters of the global market, of which new energy vehicles accounted for 29.6% of its total sales, an increase of 4.3% from the previous year.

In China's fiercely competitive automotive market, French brands such as Citroen and Peugeot are struggling, and Renault, which has been eliminated by the Chinese market, has now recognized the reality. Since it cannot have a place in the Chinese market, it will protect the existing European market.

Choosing to accelerate electric vehicle research and development in China, which has obvious electric advantages, at a time when the EU is cracking down on Chinese automakers is also a way for Renault to cut corners. However, after the tariff storm passes, such opportunistic enterprises are destined to be eliminated by Chinese automakers.