At home, automaker pinning hopes on electric vehicles to offset sluggish sales


Renault Samsung Motors is seemingly prioritizing overseas markets over sales at home as consumption in Korea sags and the Chinese market enjoys rapid growth.

During the first quarter of 2012, Renault Samsung posted exports of 27,505 units, 64 percent of its total sales of 42,939 units.

Between 2000, when France’s Renault acquired the then Korean carmaker, and 2010, the carmaker’s yearly domestic sales exceeded exports.

The carmaker saw yearly exports surpass sales at home for the first time in 2011 with 57 percent for exports versus 43 percent for domestic sales.

The proportion of exports surged over the past two years ― 29 percent in 2009 and 43 percent in 2010.

While its export targets had been Russia and the Middle East, Renault Samsung has recently been targeting China and Europe under initiative of the French headquarters.

The company is striving especially hard to expand its presence in the world’s largest automobile market of China.

Renault Samsung is about to tap the larger sedan segment in China. It plans to unveil the All-New SM7, dubbed Talisman, during the 2012 Beijing International Automotive Exhibition (also called Auto China 2012) April 23 to May 2 in Beijing.

This will mark the first time that the SM7 has been exported to China. The company has been selling three models ― the SM3, SM5 and QM5.

Under the parent Nissan-Renault Group’s strategies to make inroads into China with Renault Samsung vehicles, group chairman & CEO Carlos Ghosn is scheduled to hold a press conference during the motor show in Beijing.

China has been the world’s largest automobile market for three consecutive years. About 18.5 million units were sold in the market in 2011.

Market observers predict automobile sales in China will come to 20 million units this year.

In Korea, Renault Samsung is considering pushing ahead with development of eco-friendly vehicles.

The company plans to introduce the all-electric SM3 in 2013 in what is to become the country’s first mass produced zero-emission car.

Its new business policy could be a solution to the current lackluster sales of Renault Samsung vehicles in the local market.

It has unveiled a project to launch the 500 pilot EV cars by December 2012 after it was chosen as one of two carmakers to receive tax breaks for the production of zero-emission cars.

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

The plan is the first major project of Renault Samsung chief executive Francois Provost after he was named to head the French group’s Korean unit last September.

Comparing his experience from the group’s Russian operations as chief of operations, Provost expressed confidence in his team’s ability to meet goals set for electric vehicles as it competes with Kia’s EV Ray due for mass production also in 2013.

“I’m very much impressed with the high skills of workers here at the Busan plant and other parts of operations. Almost every day, I get requests from Europe and South America to transfer Korean engineers,” the CEO said.

The company will be importing the all-electric Fluence ZE from its parent group to supply them to government agencies until mid-2012. Its Busan factory will take over the role by localizing battery and motor production by the end of next year.

The all-electric SM3 will compete with Kia Motors Corp. which also unveiled plans to launch the mass production of the zero-emission version of its Ray compact in 2013.

Renault Samsung’s SM3 ZE and Kia’s Ray were chosen as the first two electric cars to receive tax breaks starting January 2012.

According to the Ministry of Knowledge Economy, tax breaks of up to 4.2 million won ($3,700) will be available for consumers buying the SM3 ZE and Ray, which are priced at 60 million won and 45 million won.

The ministry will have a 70 billion won budget for electric vehicle development by 2014, including the building of electric charging stations.

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