Renault Samsung to expand production

Renault Samsung CEO Francois Provost

Busan plant output increasing to 200,000 units

By Park Jin-hai

Renault Samsung Motors, the local unit of French carmaker Renault S.A., received a request from the Renault Nissan Alliance to increase production of its Rogue sport utility vehicle (SUV) by 30,000 this year, to help keep up with rising demand for the model in the United States.

Its Busan plant, which exports Rogues to the U.S., will jack up its annual output to 110,000 vehicles from April.

The Renault Nissan Alliance is a strategic partnership between Renault and Japan's Nissan Motor.

The Busan plant’s annual production will increase to 200,000 vehicles, which includes 90,000 other models.

The automaker and local community expect the increased production will help revive the local economy as well, as the Busan plant has been operating way below capacity over the last couple of years.

The local plant that once produced more than 200,000 vehicles ― 275,267 in 2010 and 244,295 in 2011 ― saw its production cut by half in 2013 to 129,439.

Following the production cut, Busan plant workers and subcontractors were subject to voluntary retirement and reduced working hours.

“Throughout the hard times, however, we worked our best to retain our skilled workforce. That was the reason we landed the request for the production increase,” said Renault Samsung Motors CEO Francois Provost, during a press meeting in Busan, Thursday.

The Busan plant, which started shipping Rogue SUVs in September, had exported 35,000 vehicles through last month. It is the company’s first strategic model for the U.S. market and is a core model that will make up about 30 percent of total production within five years.

“The deal ensures job security for some 10,000 working at the Busan plant and subcontractors. It will also revive the local economy by helping 87 local partners that supply parts for the vehicle, raising their accumulated sales to 860 billion won from 620 billion won,” Provost added.

Under the increased production plan, Busan and South Gyeongsang Province, home to the plant’s 50 partners, are forecast to see more than 500 billion won in sales, while its supply of local parts to the vehicle will reach 80 percent from the current 68 percent.

Local partners are accordingly expanding their facilities and workforces.

“Of our total sales, what we supply for Rogue vehicles represents half. We have expanded production lines so that we can cope with the increased demand. We plan to recruit more workers as well,” said Kim Jung-hwan, CEO of JCDS, which supplies seats to the carmaker.