Automaker struggles to find breakthrough in sagging sales of gasoline-powered cars


Hit by a prolonged slump in vehicle sales, Renault Samsung Motors seems to be staking all on its mass production of electric cars from early next year to jockey for the nascent market in Korea.

The automaker showcased high-end technologies in its first electric car model ― the SM3 Z.E. ― during the 2012 Busan International Motor Show, which was held from May 24-June 3.

Renault Samsung, which is offering test drives to a chosen few, is poised to release the epoch-making electric vehicle in the local market as early as this December or January.

Dubbed the “quick-drop battery exchange system,” the all-electric version of the SM3 will travel up to 160 kilometers on a 250 kilogram lithium-ion battery that can be replaced through a fully automated battery station in less than 90 seconds.

The coming eco-friendly vehicle is drawing wide attention in the market as the company has been with hit the biggest drop in year-on-year sales among the five major players, including Hyundai, Kia, GM Korea and Ssangyong, over the past few months.

 

“Success or failure of electric cars could be linked to determining the fate of Renault Samsung in the coming years,” an automotive industry executive said.

He predicted that the France-based Renault headquarters will possibly decide the scale of future investment in Korea according to market reaction for the SM3 Z.E.

“Despite the expected tardy growth in demand for electric vehicles, a key issue is whether the company will garner consumer confidence in product quality and secure sufficient battery-charging networks,” he added.

Last month, Renault Samsung signed a memorandum of understanding with POSCO ICT, an information technology-oriented firm, on establishing infrastructure for commercializing electric vehicles.

“The bilateral pact is focused on battery-charging channels nationwide and developing the electric car-rental business,” a Renault spokesman said.

Some market observers forecast the SM3 Z.E. will pave the way for the carmaker to offset the recent slump in sales of gasoline or diesel-fueled vehicles, pointing out that Hyundai Motor, the nation’s largest carmaker, has yet to push for the development of electric vehicles.

Renault should pour all-out investment and effort into electric vehicle development for close sales battles with Kia Motors, an affiliate of Hyundai Motor.

While Hyundai is prioritizing hybrid vehicles in the eco-friendly sector, Kia is in charge of development of electric vehicles in the automotive group.

Kia Motors, which is providing only public agencies with the Ray E.V., will also start mass producing the model for the public in 2013.

GM Korea has also tested the capability of Chevrolet’s all-electric EN-V concept car in Korea.

Another key issue is consumer prices of the electric vehicles.

Unless there are tax incentives that include exemptions on acquisition tax and special consumption tax, the SM3 ZE may top 65 million won, more than quadruple the price of the gasoline-fueled SM3.

Meanwhile, the Ministry of Knowledge Economy has announced that it would spend about 70 billion won ($59.5 million) on electric-vehicle development by 2014, including the building of electric charging stations.

The Korean Agency for Technology and Standards, an arm of the Ministry of Knowledge Economy, said it would come up with three Korean Industrial Standards for electric vehicle charging.

It will involve general requirements for charging systems, such as cable, plug and inlet standards, but it didn’t confirm whether battery replacement stations will be included in the list.

The Renault-Nissan alliance has developed battery swap technology. It is expected to create a mass market for both a new electric motor technology and a new logistical structure to make power supply easier than ever.

The French-Japanese alliance predicts electric vehicles to account for 10 percent of the global automobile market by 2020.

By Kim Yon-se (kys@heraldcorp.com)