Renault’s enterprise with Brilliance Auto Group Holdings in China is unable to make funds and heading for restructuring, an additional blow to the French automaker’s restricted presence on the planet’s largest automotive market.

In mild of the partnership’s “incapability to satisfy its present monetary obligations, the corporate’s board of administrators has resolved to provoke a restructuring course of,” Renault mentioned Wednesday.

The joint unit, based mostly in Shenyang, makes vans underneath the Jinbei model and was began in 2017 underneath former CEO Carlos Ghosn with Renault holding a 49 % stake.

The transfer follows Brilliance Auto Group’s entry into court-led restructuring final yr after a sequence of defaults.

The enterprise, known as Renault Brilliance Jinbei Automotive Co., or RBJAC, has sustained a steep drop in mild business car gross sales in China, Renault mentioned. 

Any winding up of the four-year-old enterprise would signify a second withdrawal by Renault from the Chinese language market in as a few years.

In 2020, the struggling automaker scaled again its already restricted presence within the Asian nation by transferring a 50 % holding in one other enterprise to companion Dongfeng Motor.

On the time, Renault mentioned it could deal with vans and electrical autos in China by separate models. The carmaker has additionally invested in an EV enterprise with Jiangling Motors Corp.

“Regardless of sturdy assist from each of RBJAC’s shareholders and a sequence of operational enchancment measures, the situations in China’s mild business car market have weakened and RBJAC continues to expertise difficulties,” Renault mentioned Wednesday.

Distant purpose

The enterprise’s gross sales volumes in China plunged 35 % within the 11 months by the tip of November to about 16,000 autos in contrast with the earlier yr, in keeping with a spokeswoman. At one level, it had purpose to promote 150,000 yearly.

Renault CEO Luca de Meo has described the corporate’s presence in China as being “virtually nowhere.”

In a bid to show the tide, it signed in August a memorandum of understanding with Geely Holding, China’s largest privately owned auto group, to collectively introduce Renault-branded hybrid autos in China.

Renault and Geely will quickly announce hybrid-focused three way partnership to provide fashions from Geely’s Lynk & Co 01 at Renault’s plant in Busan, South Korea, Reuters reported this month. The enterprise may export Lynk automobiles inbuilt South Korea duty-free to the U.S.