July 19, 2013
July 19 – Seoul, Korea – Cars on the streets of Busan and Seoul tell the story of the competitive Korean auto market, where giants Hyundai and Kia, as well as smaller rivals such as Renault Samsung Motors, have built brands over the past decade.
But it is the overseas markets where success is key.
Car makers in the world’s fifth largest market by production and sixth largest by export saw total sales rise 3.7% in June on year. But domestic sales fell – opening up capacity.
That’s one reason Renault Samsung Motors is teaming up with Alliance partner Nissan to produce the Nissan Rogue at the Busan plant, as an export to the Americas and Taiwan.
The Nissan Rogue crossover joins four models, including the Renault Latitude and Koleos.
It will be the first model from the Busan plant to go to the U.S., and Manufacturing Production Operation Chief Hae-jin Lee says extensive preparations were involved to ready the line.
“In October, we are producing the Rogue for the first time in the plant, as an engineering trial lot, so we can validate our training and facility preparation at that time,” said Lee.
Lee says Rogue production can help Busan to become a valuable export hub for the Alliance.
The Busan plant currently has a production capacity of about 252,000 vehicles per year. Now, it’s only using about 60% of that. But with production of the Nissan Rogue soon coming online, that will add an additional 25,000 vehicles next year and an additional 80,000 vehicles in 2015 – all coming from the multi-model production line at Renault Samsung Motors.
Renault Samsung faces a competitive domestic market, with issues ranging from an appreciating currency to rising wages.
Adding to that is the success of foreign car manufacturers, now with 10% market share. But Hadan Branch Manager Je Myung Choi is confident Renault Samsung’s products and reputation for quality and safety will keep customers buying.
“RSM launched a new model SM5 TCE with a downsized engine,” said Choi. “The SM5 TCE is getting a lot of attention from customers and media because it has better performance and high fuel-efficiency. Those high attentions are leading sales.”
Targeting growing sales and exports, the company’s CEO Francois Provost says efforts so far are just the beginning.
“To be an export hub for the Alliance, we should first keep a high level of quality,” said Provost. “The second challenge is competitiveness. The Busan plant was not competitive enough. If we want to be an export hub we should be very competitive. We should be one of the best plants within the Alliance. That’s the challenge.”
With Rogue production just months away, Renault Samsung Motors will meet that challenge – Busan style.