Renault Samsung Picks Up Steam

Seoul April 3, 2005; Na Jeong-juIs writing for the Korea Times reported that Renault Samsung, the smallest of South Korea’s five car manufacturers, has topped GM Daewoo Auto and Technology and Ssangyong Motor in quarterly sales in the domestic market.

In a business report released on Friday, the carmaker said it sold 26,626 units in the first three months of the year, capturing 10.9 percent of the market share. During the same period, GM Daewoo sold 24,788 units, while Ssangyong fell into a distant fifth with 15,738 units.

Renault Samsung was the only Korean carmaker that saw home sales grow during the January-March period compared to last year, despite an overall downturn in the Korean car market.

``We released our large sedan, SM7, and the new version of the SM5 in the first quarter. Sales were quite inspiring,’’ Renault Samsung vice president Cho Don-young told The Korea Times.

The carmaker has set even higher goals.

Last month, president Jerome Stoll said Renault Samsung plans to expand its market share in South Korea to 23.4 percent and increase sales by 23.3 percent to 105,000 cars this year. Last year, it sold 85,098 cars, accounting for 9.3 percent of the Korean market.

``The entire landscape of the Korean auto industry will change if our models gain popularity in the next few years,’’ Cho said. ``We have invested much to harness our sales and marketing network and increase consumer satisfaction. It is now beginning to pay off.’’

Opinions are divided on whether Renault Samsung will be able to keep its newfound form.

Auto experts agree that its strong alliance with Japan’s Nissan helped the carmaker get to where it is today, but the inability to produce a model of its own is its Achilles’ heel.

``Renault Samsung has used Nissan’s technologies to manufacture the SM3, SM5 and SM7 and sales have so far been impressive,’’ a Korea Automobile Manufacturers Association official said. ``But in the long term, if it wants to maintain strong growth, it will have to take a different approach considering that its ultimate goal is to stand on its own feet. It remains to be seen whether its strong performance will continue.’’

Many have alleged that the SM series copied established brands owned by Nissan, but Renault Samsung officials have denied the claim.

``We have made a lot of changes to meet Koreans’ tastes for safety and convenience,’’ Stoll said in a media briefing last month. ``If you compare the SM series to Nissan models and take a more closer look, you will find that they are completely different cars.’’

Despite some skepticism, Renault Samsung is positive about its past and is preparing to challenge Hyundai Motor and Kia Motors, who control a combined 70 percent of market.

The carmaker plans to invest a total of 600 billion won over the next three years in South Korea to build a plant in Pusan. Part of the money will be used to develop gasoline engines for a sport utility vehicle (SUV) to be released in 2007.

``Once our SUV rolls off the line, it will be a different game,’’ Cho said.