Renault Samsung Motors will produce its flagship SM5 midsize sedan at its Busan plant so it can carry the Mitsubishi badge as part of a new partnership sealed between the Renault-Nissan Alliance and Mitsubishi Motors on Tuesday.

All Mitsubishi vehicles made in Korea will be exported for sale in the U.S., taking advantage of tariff benefits following the free trade pact between the two countries. A more detailed timeframe was not revealed.

The new production plan comes after the Renault-Nissan Alliance and Mitsubishi recently agreed to explore shared products, technologies and manufacturing capacity.

As the first project of the alliance, they will produce the two vehicles for the Mitsubishi brand, with the first being based on the SM5, the best-selling car of the Korean carmaker owned by France-based Renault Group, which also shares the platform of its Nissan rival.

Even though details on the second, smaller model have yet to be unveiled, industry watchers predict that the car is also likely to be built at the Busan plant as it may be based on Renault Samsung’s SM3 compact.

Earlier, the Busan plant was named the factory to produce an annual 80,000 units of Nissan’s next-generation Rogue compact crossover from next year, also for U.S. sales only.

“For Renault Samsung, new projects could be helpful to its revival plan after years of sluggish sales. But more fundamentally, the carmaker needs to elevate car sales by developing a new car for its own brand name,” said an industry source on condition of anonymity.

At the end of this year, Renault Samsung plans to unveil the QM3 compact crossover, the first new car launch in six years. Based on the Renault Captur, the first batch of the vehicles to be sold in Korea will be imported from Spain.

By Lee Ji-yoon (jylee@heraldcorp.com)