Exclusive Renault Samsung to introduce French models

By Kim Tae-gyu

Renault Samsung Motors is aiming for a double-digit market share here and to import new models from its French parent company Renault S.A., possibly in 2013.

In response to recent complaints that its line-up is overly simplistic with merely four models, Renault Samsung CEO Francois Provost disclosed the plan during a recent interview with The Korea Times.

“There are basically two evolutions (in Korea’s imported car market). The first one is the increase of small cars ... We are a part of Renault that has strong competency in small cars,” said Provost who took charge of the carmaker in September.

“The second is that when we consider the slow increase of imported cars (here), we have some opportunities ... We can pick up some fashionable cars from Renault and some fashionable designs to adapt them to the Korean market.”

He said that new models from Renault S.A. would be smaller vehicles compared to the current line-up but did not elaborate on the intended number of models or other details.

Provost meant that the release of the vehicles will not take place this year because he is set to finalize mid-term plans including appropriate models late this year or early 2013.

In extending the line-up, however, Provost made it clear that the firm would not stop its time-honored convention of developing its own vehicles — the SM3, SM5 and SM7 sedans, and the QM5 sports utility vehicle.

He was very proud that Renault Samsung is a full-fledged entity with an all-round capacity in design, production and sales.

In the short term, the CEO said that he will seek to improve operational efficiency of the company through more localization of its supply chain management.

Renault Samsung suffered some hitches last year in the aftermath of the March earthquake in Japan and the resultant production disruption of automotive component producers there, which hurt its bottom line and market share.

“We have a strong line-up and good products but not enough localization. So our short-term priority is to increase localization to 80 percent including engines in particular,” he said. The outfit’s current localization rate in procuring components is around 66 percent.

Provost also said its Busan plants generate high costs relative to other Renault S.A. facilities, which he said will be addressed this year.

On the back of such maneuvers, Provost set his goal of regaining a double-digit market share in Asia’s fourth-largest economy, a milestone the carmaker achieved for several consecutive years but missed in 2011.

Its market share remained at more than 10 percent for six years in a row through 2010 when it reached 11.9 percent but dipped to 8.3 percent last year, the lowest since 2001.

Provost insinuated that the decline had something to do with the number of vehicles available.

“Clearly our position should be a double-digit market share. When we launched new models in 2009 and 2010, we were over 10 percent. Today we are a little bit below it with fewer models,” he said. “Clearly our perspective is to keep our double-digit market share.”

Asked whether he thinks of removing the name Samsung from the brand, his answer was prompt and succinct — no way.

“I think the brand is part of our culture and strong assets. I do not forget that we started the company from what was the previous Samsung Motors. Most of our assets and employees were from Samsung,” he said.

“We have this one top asset of our brand and our brand is Renault Samsung. I do not have a plan to remove the name.”

Renault Samsung made its debut in 1999 through the acquisition of Samsung Group’s automotive venture, which struggled to find its feet in the aftermath of the Asian financial crisis in the late 1990s.

Samsung Card, a financial subsidiary of Samsung Group, still has a 19.9-percent stake in Renault Samsung with the remainder held by Renault S.A.