Renault-Samsung eyes bigger sale

Gilles Normand, right, Renault Group senior vice president and chairman for Asia-Pacific, speaks to reporters about Renault-Samsung Motors’ (RSM) recovery plan for this year at its main office in Gasan-dong, Seoul, Friday. Sitting next to him is CEO Francois Provost. / Yonhap

Carmaker aims to sell 65,000 vehicles

By Park Si-soo

Renault-Samsung Motors (RSM) said Friday it aims to sell 65,000 vehicles in Korea this year, up from 59,900 last year, on the back of improved product quality and enhanced customer services.

The troubled local unit of French automaker Renault SA has pledged to regain at least a 10 percent presence in the domestic market by diversifying its product lineup and bolstering manufacturing efficiency at its Busan plant.

The company will revamp the plant for the production of Nissan’s new Rogue starting next year and make significant investment in facilities over the next three years to turn it into one of the best manufacturing bases operated under the Renault-Nissan Alliance.

“Renault Samsung Motors will make a turnaround in both domestic and global markets in 2013,” RSM CEO Francois Provost said during a news conference at the firm’s headquarters in Gasan-dong, Seoul.

“Based on our long-term strategy in Korea and success of our RSM 2012 Revival Plan, we will develop RSM into a sustainable and powerful enterprise in order to play a leading role in accelerating the expansion of Renault Group in the Asia-Pacific market.”

Gilles Normand, senior vice president and chairman of Renault Group in Asia-Pacific, took part in the conference, pledging that the group will provide “all-out” support to RSM and its revival efforts.

“Renault Group will provide comprehensive support to help RSM become one of the leading automakers in the Korean and global markets and contribute more to the growth of the Renault Group,” Normand said.

Last year the nation’s fourth-largest automaker grappled with a heady mix of negatives that included a sharp drop in sales due to sluggish demand, the ensuing credit crunch and declining production efficiency of the Busan plant.

The firm sold 154,309 vehicles at home and abroad last year, down a staggering 37.5 percent from a year earlier. This poor performance forced it to sack hundreds of employees in an aggressive cost saving drive.

Mindful of the situation, Carlos Ghosn, chairman of the Renault-Nissan Alliance, visited Seoul in July and announced a set of recovery plans for RSM, one of which was injecting $160 million into the firm to roll out Nissan’s next-generation crossover Rogue SUVs at the Busan plant from 2014.

The recovery measures pushed up the firm’s domestic sales starting in October, but industry observers are still doubtful that they will bring about a dramatic turnaround this year.

The RSM CEO hinted at launching new models ㅡ SM5 and QM5 ㅡ in the near future.

“I agree. We currently have a limited lineup,” Provost said after being asked whether that undermines the company’s competitive edge. “We have to extend our lineup as the market is getting competitive.”

He added, “Developing new models is crucial to reach this year’s sales goal and the long-term goal of regaining 10 percent market share.” He gave indications that new models would be introduced “as quick as possible.” An RSM spokesman said the firm is scheduled to initiate the development projects for two models this year.

Asked about allegations that RSM’s research and development (R&D) center suffered from a brain drain last year, he offered a vehement denial.

“I have no specific turnover rate of genius R&D members, which means we had no loss of R&D members last year,” the CEO said. He touted the R&D center for “fully dedicating itself to improving products,” for which he was impressed by the “fantastic skills and R&D members.”

“I have absolutely no doubt over our R&D capability,” he said.

RSM set the aggressive objective of procuring over 80 percent of its entire parts supply from local vendors this year, up from 70 percent in 2012.

“These efforts help to increase the competitiveness of suppliers and give new export opportunities to part suppliers within Renault-Nissan Alliance beyond Renault Samsung Motors realizing a win-win partnership,” the automaker said in a statement.

It also plans to establish 14 new customer service centers this year to expand their number to 500 nationwide.