(Yicai) June 24 -- Chinese automaker Geely Holding Group will take a 26 percent stake in a joint venture controlled by France’s Renault Group in Brazil, marking its entry into Latin America’s largest automotive market.

The JV will manufacture and distribute passenger vehicles under both the Renault and Geely brands, as well as Renault-branded light commercial vehicles, the Hangzhou-based company announced recently. The partnership will strengthen Geely's brand presence in Brazil and broaden its market reach, it added.

Renault, headquartered in Boulogne-Billancourt and owner of the Renault, Dacia, and Alpine brands, will retain nearly 74 percent of the JV's equity, while an independent third party will hold the remaining 0.03 percent. The partnership with Geely is initially set for 20 years, with an automatic renewal option for an additional five years.

The JV's board of directors will comprise six members, with Renault appointing four and Geely the remaining two. Renault will also nominate the chief executive. Notably, the venture will operate with independent financing, and shareholders will not bear any additional financial obligations.

This agreement builds upon a framework deal signed in February. At the time, Renault and Geely agreed to collaborate on the production and sale of zero- and low-emission vehicles in Brazil. Through its investment in Renault do Brasil, Geely gains access to Renault’s two local factories, along with related sales and service infrastructure.

The two companies began collaborating in 2021, initially focusing on hybrid markets in China and South Korea. In 2022, they signed an agreement to produce Renault-branded hybrid models at Renault’s Busan plant in South Korea, using Geely’s Compact Modular Architecture and hybrid technologies. In May 2024, they launched a powertrain joint venture called Horse Powertrain, with equal ownership stakes.

Analysts noted that, unlike Geely’s earlier technology-export model in South Korea, the Brazil venture enables the Chinese automaker to sell its own models directly in the local market. This represents a strategic shift from technical collaboration to full market penetration. By leveraging Renault’s existing production capacity and distribution network, Geely also avoids the financial and operational risks of building its own manufacturing facility.

Geely is entering a growing market. According to the Brazilian Association of Automotive Vehicle Manufacturers, new car sales rose 14 percent year-on-year to 2.6 million units last year. Among Chinese brands, electric vehicle maker BYD led the market with 76,800 units sold. Another popular manufacturer was Chery Automobile, the owner of brands Chery, Exeed and Jetour, nearly doubling its sales to 60,900 units.

Editor: Emmi Laine