Renault deal drives Dongfeng up

The Standard - Shares of Dongfeng Motor Group (0489) rose as much as 3 percent yesterday against a retreating market.

The stock was cheered by the mainland environmental authority's approval of a joint venture between France- based Renault and the parent firm of Dongfeng Motor.

Carlos Tevares, chief operating officer of Renault, told Dow Jones Newswires that its venture with Dongfeng Motor Group got the nod from the environmental ministry.

"Our proposals include a green-vehicle component," Tevares said, adding the project still needs approval from the National Development and Reform Commission.

The 7.2 billion yuan (HK$9.1 billion) 50:50 venture will have annual production capacity of 150,000 units at a factory in Wuhan, Hubei province.

It will specialize in making sports utility and multi- purpose vehicles along with electric cars. The venture is expected to be much larger than Dongfeng's plant with Japan's Honda Motor.

Renault holds 51 percent of Europe's electric-vehicle market, compared with 9 percent of the continent's overall car market.

Shares of Dongfeng Motor closed at HK$11.30 yesterday, up 2.91 percent.