Can Renault Samsung withstand escalating emissions controversy?

QM3 found to emit 17 times more nitrogen oxide than registered

By Lee Hyo-sik

• Published May 17, 2016 4:54 PM KST
• Updated May 17, 2016 4:54 PM KST

Renault Samsung has been riding high on its popular QM3 compact sports utility vehicle (SUV) here over the past year. The Korean unit of French automaker Renault has made a sales pitch that the vehicle boasts higher fuel economy, while emitting less nitrogen oxide and other exhaust gases, compared to competing models of other automakers.

However, this turned out not to be the case, according to the Ministry of Environment, which found that the QM3 releases 17 times more nitrogen oxide than the carmaker claims on real road conditions.

This latest finding is feared to adversely affect the sales of the QM3 and other Renault models here, according to industry analysts, who say the carmaker’s attempts to reduce exhaust gases will add costs and may delay the introduction of new models here.

Following Volkswagen’s unprecedented emissions cheating scandal last September, the ministry conducted a test of 20 diesel powered cars sold in Korea from December through April.

Since March 2014 when Renault Samsung, headed by CEO Park Dong-hoon, began importing the QM3 from the Renault plant in Spain, more than 46,000 have been sold, becoming one of its most popular models. In 2015 alone, Korean customers purchased a total of 24,560 QM3s.

“Following the Volkswagen scandal last year, the view of car buyers of diesel-powered cars has deteriorated in Korea,” said Esther Yim, an analyst at Samsung Securities. “The latest government findings that diesel vehicles release significantly more exhaust gases than advertised has added fuel to the flames. I think the era of diesel cars is coming to an end.”

Yim said Renault Samsung will face a harder time selling the QM3, expecting that the government will introduce a series of measures to discourage car buyers from purchasing diesel cars.

“Diesel vehicles have been cited as one of main sources of fine dust, which has recently emerged as a crucial environmental issue in Korea. Given all these, I think the sales of the QM3 and other diesel cars will decline,” the analyst said.

However, Renault Samsung argues that the QM3 emits less nitrogen oxide than competing models, stressing the compact SUV was found to release only seven times more emissions in real road conditions.

“The government said the QM3 produces 17 times more nitrogen oxide on the road than indoors. But we found that it was only seven times more,” a Renault Samsung spokesman said. “Currently, carmakers are required to test their vehicles in a preset indoor environment, not out on road conditions. We haven’t broken any regulations.”

The spokesman then said the automaker will take all possible steps to reduce the level of emissions in the QM3 by the end of this year, adding that the ongoing emissions controversy will not tarnish its brand image nor negatively affect the sales of the QM3 and other models.