In a statement Renault said, it would sell a little over a third of its Korea unit to China’s Geely Automobile Holdings for around $200 million. The move is aimed at freeing up funds for Renault to invest in its electric business in core markets.

Renault, whose sales fell for the third straight year in 2021, is in the middle of turnaround plan aimed at boosting profit margins and splitting its electric vehicle (EV) and combustion engine businesses as it looks to catch up with rivals including Tesla and Volkswagen.

The development comes in the wake of media reports stating Nissan Motor may lower its stake in Renault Korea Motors.

“It’s a partnership, and Geely might be knocking on the door of the South Korean EV market,” said Kim Jin-woo, an analyst at Korea Investment & Securities. “For Chinese firms, building a successful track record in South Korea can help sell EVs in other emerging markets, as well as Europe and U.S., which the firms continue to knock the door of, but they are difficult markets”.

Renault Korea Motors will issue 45.4 million shares at 5,818 won per share to Geely’s unit, Centurion Industries Ltd, said the two companies in a statement on Tuesday.

($1 = 1,274.3600 won)

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Tags: China, Chinese, combustion engine, core markets, electric business, electric vehicle, EV, Geely, Geely Automobile Holdings, invest, investments, Nissan Motor, partnership, profit margins, Renault, Renault Korea Motor, turnaround plan