Renault to boost Korean operation

Carlos Tavares, right, chief operating officer of Renault Group, speaks about plans to boost sales of its troubled Korean unit, Renault Samsung Motors (RSM), along with Francois Provost, RSM CEO, during a news conference at Westin Chosun in downtown Seoul, Wednesday. / Courtesy of Renault Samsung Motors

A top executive of Renault Group Wednesday emphasized the importance of Renault Samsung Motors (RSM) as an export base in Asia and pledged to fully support the troubled local affiliate.

“We want to be a significant player in the highly competitive Korean market,” Carlos Tavares, chief operating officer of the French automaker said during a news conference at the Westin Chosun in downtown Seoul. “We want to use RSM as an export base in Asia for Renault.”

He added that they target increasing their market share in Korea to 10 percent in the near future, up from 8.7 percent last year, and also noted that RSM plays an important role in the group’s strategy to lift sales outside Western Europe to 50 percent in 2013 from an estimated 42 percent this year.

He came to Korea to monitor RSM’s revival plan to boost sluggish sales in the local market and share the group’s vision. His trip to Seoul was also accompanied by Jerome Stoll, the group executive vice president, who was the first president and CEO of Renault Samsung Motors after it was acquired by Renault in September 2000.

Tavares also flatly refuted rumors that the French automaker may sell off its Korean unit amid global economic uncertainty. He stated RSM is taking a significant role in the Renault-Nissan alliance given that the group has invested 1.7 trillion won in the unit over the past 10 years and each year RSM in fact exports more than 100,000 vehicles through the alliance to 60 countries.

But he also acknowledged that RSM has suffered in recent years from sluggish sales.

According to RSM, it sold a total of 246,959 cars last year, down 9 percent from the previous one. It sold 109,221 locally and 137,738 overseas.

In the first quarter of this year, it saw the biggest drop in year-on-year sales among the five major players in the local market, the other four being Hyundai, Kia, GM Korea and Ssangyong. Due to the drop in sales, RSM has suspended operations at its Busan plant several times this year.

As a measure to help boost sluggish sales in Korea, Renault plans to improve its competitiveness in terms of design and customer services as well as introduce new models, Tavares said.

He mentioned a small crossover utility vehicle scheduled to be released late next year as well as other electric vehicles.

Currently, RSM sells three SM series sedans ― the SM3, the SM5 and the SM7 ― and the QM5 SUV, comparatively limited lineups, compared to local competitors.

Tavares also mentioned that the group will support RSM to achieve parts localization up to 80 percent from the current about 70 percent so that vehicles from RSM have more competitiveness in the Korean market. <The Korea Times/Kim Tae-jong>

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