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Renault-Nissan announces joint venture to manufacture ‘electric cars’ in China

Nissan Motor and Renault have announced details of a joint venture it has established with Chinese automotive firm Dongfeng Motor Group. The primary objective of the joint venture between the three businesses is to develop and manufacture 'electric cars' in the country.

The automotive companies are aiming to tap into the market boom for cleaner 'new energy' vehicles in what is the world's biggest auto sector. It's just the latest in a series of joint ventures which have been set-up recently between US or European car manufacturers with domestic companies.

Earlier this month, Ford Motor Co disclosed that it was exploring the possibility of forming a joint venture with Chinese car maker Anhui Zotye to build electric cars under a new brand, whilst, Tesla, Daimler AG and General Motors have already made their intentions in relation to the electric market in China known.

China's government has launched a number of initiatives and subsidies aimed at ensuring that electric or hybrid vehicles make up at least a fifth of the country's auto sales by 2025 - as they attempt to tackle air pollution problems which blight some of its major cities.

Nissan-Renault's joint venture with the Chinese car manufacturer has been entitled eGt New Energy Automotive Co - and it has been reported that Nissan and Renault will both get a 25% stake in the business respectively, while Dongfeng will own 50% according to a joint-statement released by Nissan and Renault earlier this week.

In addition to this, it has been disclosed that eGT will design a new electric vehicle on a subcompact crossover SUV platform of the Renault-Nissan alliance. Chief Executive Officer of the Renault-Nissan alliance, Carlos Ghosn, believes the formation of joint venture with the Chinese automakers represent its underlying commitment to the continued development of electric vehicles in China. Ghosn said: "The establishment of the new joint venture with Dongfeng confirms our common commitment to develop competitive electric vehicles for the Chinese market."

The statement did not disclose the financial commitments made by the respective companies, nor did it say when the vehicles will be launched. Nissan and Renault both have experience in manufacturing electric cars and many analysts are predicting its joint venture in China could herald more success for them in the electric market. Nissan's Leaf compact hatchback was the world's top-selling electric car in 2010.

However, it's clear that this switch towards electrification from global automakers has been brought about directly due to policies in China where the introduction of new 'energy cars' are being pursued aggressively. Under China's latest proposals, electric vehicle sales are expected to rise by 8% this year, 10% in 2019 and 12% by 2020.