China’s Geely Holding (GEELY.UL) and France’s Renault (RENA.PA) have signed an agreement to collaborate in bringing fuel-efficient hybrid electric vehicles (HEVs) and internal combustion engine (ICE) models to the South Korean market, as well as for export sales.

The agreement：The vehicles will utilize the compact modular architecture (CMA) of Chinese auto giant Geely, developed by its R&D center in Sweden, and will take advantage of the its advanced hybrid powertrain technologies. 

The partnership also forms part of French auto giant Renault’s “Renaulution” program. While vehicles will be initially designed specifically for the South Korean market, Renault-Samsung will allow for their export in the future.

The hybrid electric vehicle is Lynk 01 PHEV , which will be exported to the U.S. market from South Korea under the Renault label in the future. As for why the Korean-made Link 01 PHEV will be exported to the United States under the Renault label, the reason is that there is a free trade agreement between Korea and the United States, which is free of tariffs.

“This collaboration marks a further step in efforts by the two automobile groups in producing low-emission models, as well as increasing their penetration in the Asian HEV markets,” the statement said.

Our take：In the context of an ongoing chip shortage and the COVID-19 pandemic, Renault’s global sales volume has been declining for three consecutive years. The Cooperation with Geely which has a proven track record in creating mutually beneficial collaborations will help Renault to stage a comeback in the Asian market.