BY: Khushhboo Kabra
Renault and Ford have joined hands to develop electric and low-cost electric vehicles for the European market. The main aim and goal of this partnership is to reduce cost production and stay competitive in the market as Chinese people are becoming true rivals of automakers ‘ game.
The company is facing very tough competition, said Jim Farley, Ford CEO, as Chinese automakers are playing a massive game in the field of automakers as they sell vehicles at cheap prices. He says if such a pattern continues, it will adversely affect the future survival of Ford in this industry.
The European car market is adversely affected by the fast growing Chinese auto market.
Renault and Ford as a part of partnership will manufacture its first small EVs in Europe by 2028 in northern France. The EV’s will be smaller in size and other electric vehicles Ford is planning to sell in the United States. These cars will significantly fill the gap between Ford’s product lineup, according to CEO Jim Farley.
The automakers will collaborate together to create new vans differentiating between Renault van and another version as Ford van in Europe.
Farley claims that Renault and Ford together can build a very strong market in the European Light Commercial Market (LCV) which will initially make it hard for the Chinese market to compete with.
Initially as of now, Chinese van brands are not very common in Europe. Ford and Renault already faced challenges from Chinese companies in part of Asia, Africa and Latin America
Chinese Automakers will enter the European market very soon and can destroy the entire game, so without any delay Renaults want to act quickly and firmly on this and start launching new products, said Renault CEO Francois Provost.
Renault Team visited Ford’s headquarters in Detroit this march which eventually turned up into a decision of partnership.
Ford is dealing with shrinking market share in Europe from 6.1% in 2019 to 3.3% this year because the company has reduced its focus on selling passenger cars in Europe which eventually led to job cuts, factory closure in Germany, at the same time.
Ford intends to employ Renault’s electric vehicle (EV) chassis, but will design the vehicles in its own Ford style. This would allow Ford to compete more effectively in Europe’s EV industry against major competitors such as Volkswagen and rapidly developing Chinese EV businesses.
Ford already collaborates with Volkswagen in Europe, building two EV vehicles and vans on their platform. Ford CEO Jim Farley stated that the new cooperation with Renault will supplement (rather than replace) the company’s existing partnership with Volkswagen.
Renault, on the other hand, collaborates with other firms, having already developed vans with Nissan and the Volvo Group.
Renault is a modest European vehicle firm that does not sell automobiles in China or the United States, the world’s two largest car markets. As a result, working with Ford allows Renault to expand production volume while lowering manufacturing costs.
Renault is actively seeking more partners to keep its factories busy and alleviate the financial burden of creating new electric cars (EVs) on its own.
Renault plans to construct two vehicles in Brazil by 2026, utilising platforms from other firms, and it is also collaborating with more automakers, including China’s Chery, to jointly manufacture and sell automobiles.
Renault’s CEO Provost stated that their goal is to demonstrate that Europe can make electric vehicles as competitively and cost-effectively as China.