China's Geely to Buy Major Stake in Renault Korea

China's Geely, which owns Volvo, will buy a 34-percent stake in Renault Korea for W264 billion (US$1=W1,276).

The Korean automaker said Tuesday that Geely will acquire the stake by buying newly issued shares, reducing the French Renault Group's stake from 80.1 percent to 52.9 percent, while Samsung Card's stake will drop from 19.9 percent to 13.1 percent.

The troubled Korean automaker changed its name from Renault Samsung in March to make a fresh start.

This is the second time a Chinese automaker has bought into a Korean carmaker since Shanghai Automotive Industry Corp. bought Ssangyong in 2006. SAIC bought Ssangyong simply to obtain its SUV manufacturing technology, but industry watchers say this time it is the other way round since Renault Korea is interested in Geely's knowhow.

But an industry insider said Geely benefits by getting hold of a better-known platform. "Geely still can't sell cars overseas under its own brand. It looks like they're eyeing the Korean market as a test bed."