French automaker Renault is poised to make "massive investments" in China, the company announced Monday, with plans to increase sales of locally built vehicles in the country and wean it from cash-strapped European consumers.
The third-biggest vehicle manufacturer in Europe, Renault lags behind its continental rivals PSA Peugeot Citroën, BMW and Mercedes Benz in expanding in China's auto market. Instead, it has been relying on strong sales of its highly popular budget cars in Europe and other emerging markets to sustain itself in a highly unstable economy.
The company earlier reported that its sales of cars and light trucks rose by 3.2 percent last year to 2.7 million vehicles, thanks mainly to strong sales of the Renault Clio and Captur as well as the Sandero and Duster models made by its Romanian subsidiary, Automobile Dacia. However, it is still slightly below global industry growth standards, according to Reuters.
In 2014, only 34,000 vehicles were sold in China under the Renault marque, compared to 734,000 at Peugeot. However, company executives forecast higher sales once it begins selling vehicles via a joint venture with domestic manufacturer Dongfeng next year.
"In China, we will have a minimum of 3 percent and very likely 6 percent of the market," Renault CEO Carlos Ghosn said at a roundtable discussion in Paris.
"That's a lot of cars, and that means you can expect a massive investment program in China in the coming years."
In July the previous year, Renault revealed plans to build a Chinese factory with initial production capacity of 100,000 vehicles, which will eventually be increased to more than half a million cars.
Renault's vehicle registration climbed 12.5 percent in Europe last year, outpacing the 5.4-percent growth in the global market. In contrast, new registrations outside Europe dropped by 5.9 percent, with a 10.7 decline in volumes across the Americas as well as a 9.2 drop in Africa, India and the Middle East.
Overall, the company sees a 2-percent growth in the global market for 2015, with Europe expected to grow by 1-2 percent and France to remain stable, it said in a statement.