Beijing (ZXZC)- French automaker Renault Group and China’s largest privately-owned automotive group Geely Holding Group announced today that they have signed an MoU framework agreement to create an innovative cooperation.

Photo credit: Geely

Initially, the cooperation will focus on China and South Korea Markets. In China, they will jointly introduce Renault-branded hybrid vehicles based on Geely’s technologies and industrial footprint while the French company will be responsible for branding strategy, channel and service development, defining appropriate customer journey.

In South Korea, both parties will develop vehicles for the market based on Lynk & Co’s compact modular architecture (CMA). Besides, both parties also plan to seek more in-depth potential partnership.

In July, a local media reported that Renault would use the Geely’s CMA to make traditional fossil-fuel vehicles in China. The CMA was jointly developed by Geely and Volvo Cars. The highly flexible and scalable architecture for small and mid-size cars integrates advanced European R&D concepts with cutting-edge technologies from around the world. It has become the new foundation for Volvo and Lynk & Co products as well as the latest Geely Auto products.

Since 2000, Renault has held an 80% stake in Renault Samsung Motors. In July, Renault Samsung sold 11,003 vehicles, up 24% from a year ago thanks to strong exports of its SUV models. For the first seven months of this year, the company’s sales declined 13% year on year to 66,959 vehicles.

This is the first important announcement of Renault China since Weiming Soh was appointed as its CEO in March. Considered as an iconic figure in China’s auto industry, Soh worked at Volkswagen for 15 years, helping increase sales and built a competitive local team.