Renault venture with carmaker China Brilliance stops paying salaries, expected to undergo liquidation
- Renault Brilliance tells more than 1,000 employees that it will not pay salaries or contribute to pension schemes
- Closure will represent French carmaker’s second exit from a Chinese venture since April last year
Renault Brilliance Jinbei Automotive, in which Renault owns a 49 per cent stake, earlier this week told more than 1,000 employees that the company would not be able to pay them monthly salaries, and that it would not contribute to their pension schemes either, according to two sources that have business ties with the vehicle maker. They added that it was highly likely that the venture would undergo liquidation soon.
The two partners had pinned their hopes on fresh capital from new investors, but the chances of this happening were slim, because it would be difficult to turn the venture around even with additional investment, the sources said.
Renault would not comment on the matter, while Brilliance could not be reached for comment on Wednesday.
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The French carmaker, which is based in Boulogne-Billancourt in western Paris, said during its exit from the Dongfeng Motor venture that it would focus on producing light commercial vehicles with China Brilliance.
