Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Renault Samsung's future at juncture on group EVP's visit
Renault Group Executive Vice President for Manufacturing and Supply Chain Jose Vicente de los Mozos, center, speaks to Renault Samsung employees during his visit to the company's Busan plant in this February 2019 photo. Courtesy of Renault Samsung
By Nam Hyun-woo
By Nam Hyun-woo
Renault Samsung could see a “critical juncture” in its corporate sustainability in the near future, after the executive vice president of Renault Group made a visit, with the apparent purpose of allocating new vehicles to the carmaker.
Since Renault Samsung's sustainability hinges on whether it can operate its key plant in Busan after receiving new models to manufacture, industry officials said the senior executive's visit may also serve as a catalyst for the domestic automobile industry.
According to Renault Samsung, Renault Group Executive Vice President for Manufacturing and Supply Chain Jose Vicente de los Mozos visited Renault Samsung's Busan plant and met a number of senior company executives.
Renault Samsung officials refused to disclose the specifics of his visit and downplayed its significance saying it was “a regular visit.” However, sources knowledgeable on the matter said he used his closed-door meeting with company executives to elaborate Renault's adjusted business plans such as the launching of new models for the plant.
“It seems that de los Mozos holds the key for Renault Samsung's sustainability, as it has an urgent need to secure new vehicles to keep its plant operating,” a source said.
Renault Samsung is facing rivalry with other Renault, Nissan and Mitsubishi plants across the world to get more production orders from its headquarters.
So far, the Busan plant has been largely relying on manufacturing the Nissan Rogue, which has accounted for nearly half of the plant's output. Since this manufacturing contract will expire in March, the company is seeking to secure the production of the Renault XM3 crossover which would be shipped to the European market.
The company initially sought to win the XM3 production in the first half of last year and begin manufacturing in the second half of this year. However, little progress has been made following labor disputes and subsequent partial strikes, which aggravated the company's productivity.
In February last year, when the union's strike was at its peak, de los Mozos visited the Busan plant and warned that the operating cost of Renault Samsung was the highest among all Renault plants, and the plant would lose its competitiveness in case of further increase in costs.
Securing production of the XM3 for export is critical for Renault Samsung's sustainability, as the company's domestic sales continue to drop. The company sold 164,941 vehicles last year, down 23.5 percent from a year earlier.
Renault Samsung's slump is expected to deal another heavy blow to the Korean automobile industry, which is already ailing from SsangYong Motor's financial difficulties. SsangYong Motor's largest stakeholder, Mahindra & Mahindra, is currently staging a tug-of-war with the state-run Korea Development Bank over a government aid package.