Alpine and Dacia were the first marques for a new series concerning Groupe Renault. Future model plans for RSM’s Samsung brand make up this, the second feature, while a third and a fourth concentrating on Renault passenger vehicles will follow later in January.
Sales up by 39 per cent in 2016
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Renault Samsung Motors sold 111,101 vehicles in South Korea during 2016. A 39 percent year on year surge from the 80,017 cars and SUVs delivered in 2015 was enough to lift the Samsung brand one place into fourth position ahead of SsangYong.
The Mahindra-controlled brand had a good 2016 too but its sales total of 103,554 luxury sedans, SUVs and minivans wasn’t enough to fend off RSM and its wealth of new and additional models.
RSM-built Nissans and Renaults for export
Groupe Renault’s strategy for the once troubled RSM is at last paying dividends and that is thanks to a combination of factors. Adding SUVs – imported and locally made – and far more stylish sedans than it formerly had in its range are most of the reason why things have been turned around.
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By GlobalDataExports easily outnumber RSM’s domestic sales, which is how the division can claim to have crossed the quarter of a million mark in 2016, selling a combined 257,345 vehicles at home and in export markets during 2016. It was the OEM’s second best performance in the last six years: Renault Samsung sold 271,479 cars in 2010. The majority of those vehicles had Renault or Nissan badges and were sold in countries other than South Korea.
In July 2012, Renault revealed that Renault Samsung Motors would also build the then forthcoming next generation Nissan Rogue (in some countries, the same SUV is called X-Trail). Production at Busan – RSM’s only plant – commenced in September 2014, with the first exports to the US following later that month. The factory in South Korea’s second largest city has an annual capacity of 300,000 vehicles a year of which 80,000 is for the Rogue.
Samsung takes market share from the mighty Hyundai-Kia
South Korea is a highly usual market and a big one too. Apart from the USA and Australia, which other developed nation has an LCV as its top seller? Technically speaking, that’s what the Ford F-Series pick-up range and the Toyota Hilux are but as we know, these are often bought as dual-purpose work and family vehicles. Not so in RK, where the number one model in 2016 was the Hyundai Porter, a rugged looking little truck which is, incidentally, not exactly a fresh design, having been on the market for many years. HMC sold 96,950 Porters last year, which was about 3,000 more than the second placed Hyundai Avante (Elantra in some countries).
In spite of having only one model in the top 20, RSM was able to make a dent in HMG’s sales. Hyundai, Genesis and Kia’s combined 79 per cent share was down on the Group’s total percentage compared to 2015, and this has been the trend in recent years. RSM had 7.0 per cent, which was up from just 5.1 per cent in 2015.
At least two new additional models in 2017
More additional vehicles to expand what is a six-model line-up should see the Samsung brand close the admittedly large gap to the number three automaker, GM Korea, this year. In 2016, the Chevolet brand had sales of 180,275 vehicles, compared to Samsung’s 111,101. Kia Motors’s total in second place was 535,001 and Hyundai sold 634,338 vehicles.
The first new vehicle has just gone on sale and it’s not one which many had been expecting. The tiny Twizy, of which Renault has sold only some 18,000 of since 2012, is now a Samsung too.
Official data show 14 units of the quadricycle being registered in the Republic of Korea (RK) during December. Renault’s Valladolid plant in Spain began shipments to the port of Busan in October. The official launch is later in January.
Whether or not the Twizy is eventually replaced remains open to speculation. On the one hand, a fresh body on the existing platform seems a simple enough and low cost option. Against that, the vehicle cannot by any measure be accused of having been successful, so low is the rate of build. Surely Renault could do with the extra capacity at Valladolid building more units of the Kadjar and Captur/Samsung SM3 SUVs?
The other fresh Samsung for 2017 is to be a new five-door hatchback. As the picture caption above shows, the speculatively titled SM2 will be the Renault Clio with Samsung badges. What many outside South Korea have forgotten is just now aggressively the authorities in Seoul are going after the Volkswagen Group, not just Audi Volkswagen Korea, the importer.
Some 80 model variants have been banned from sale in RK and prior to this, Audi Volkswagen Korea was a very successful business, with the Audi A4 and VW Golf particularly popular. Diesel vehicles are still keenly sought after by many people and small or compact hatchbacks too.
With so many new and facelifted B segment models due out in Europe during 2017 and 2018, led by the Polo and Fiesta, Renault is going to have a massive battle on its hands to maintain Clio sales across the region. Workers at Flins will soon be warmly welcoming the still secret plans to export the Clio to South Korea. The French plant will otherwise be the most obvious loser from the wave of new models which will soon be washing across Europe.
The next model to be added by RSM after the Twizy and Clio could well be the Mégane five-door. The current generation is still about two years away from a facelift, so RSM could get it onto the market while its looks are still contemporary. In fact, the best idea would be to launch it ahead of the Clio, though there is no official plan for that. All those people who loved the Golf and who cannot now buy one due to Audi Volkswagen Korea’s ongoing punishment will be casting about for another import brand C segment hatchback.
One Samsung C segment model which does already exist is the SM3. There is something strange going on here, as this Renault Fluence-based sedan has been allowed to become very old for a Korean car. Production at Busan began in June 2009, and it continues. Last year, 9,503 were sold, which was a not unexpected plunge of 38 percent but nonetheless this reeks of poor strategic planning by Groupe Renault.
Logically, RSM should have been allowed to replace the SM3 in 2016 at the very latest. Why has the company been stuck with the current car for so long? In April, we will probably learn the answer. That’s when a version of the Renault Mégane Grand Coupé should make its public debut. The Busan motor show took place in 2016 so this year it will be Seoul’s turn to host the annual national event.
If there is no new SM3 at SIMS 2017, then serious questions need to be asked about what on earth the people at Groupe Renault who must approve RSM’s business plan are playing at. Renault Samsung’s dealers have battled valiantly with an ill-proportioned and average to drive model for seven and a half years.
The current generation (model code: L38) Alliance P3 architecture Samsung SM3 had its world premiere at the Seoul motor show in April 2009. It went on sale in South Korea three months later. Realistically, a replacement was needed about five years ago.
Presuming the four-door Mégane does reach Samsung dealerships by mid-year, RSM looks set to have a very good 2017 indeed. It also means the chances of the Mégane hatchback also being made at Busan would be increased.
This style of car is not a mainstream one in South Korea, but as the Golf and Hyundai’s imports of the i30 from Europe have proved, it’s a growing preference for many younger buyers.
GM Korea is another player which has seen its C-segment sales collapse due to an old product – Cruze deliveries numbered only 10,847 last year, which was a 36 per cent plunge. Cruze production at Gunsan commenced in November 2016 and the car was in local market showrooms a few weeks later. Still, December volume fell by 39 per cent year-on-year – what a missed opportunity for RSM.
If Renault Samsung doesn’t have its own version of the Mégane hatchback in 2017, HMG will not be able to believe its luck: the Kia K3 has less than a year of production left so it would be hit hard by a fresh Samsung five-door hatchback in the C segment. Sales of the current K3 sedan fell by 14 per cent in 2016 to 36,854 (this is the same car as other countries’ Forte or Cerato). Registrations of the Hyundai i30, which unlike the closely related K3, is an import, were only 2,441 units in 2016, a 26 per cent decline.
There is a hole in the Samsung line-up above the SM3 and that’s set to open even further once the SM5 goes out of production, which it should do later this year. The reason for that is the phenomenal success of the SM6. This car, which Europeans will know as the Renault Talisman sedan, is far more successful in South Korea than the Renault original is worldwide.
In CY2016, RSM sold 57,478 SM6 sedans. As there is almost no demand for D segment estates, this body style is neither built nor imported. Like all other locally made Samsungs, the SM6 is manufactured at the Busan works.
A facelift for the SM6 should debut at the 2019 Seoul motor show and be on sale during the following month (May). The next generation SM6 should follow at the start of 2023 and use an evolution of the existing model’s Alliance CMF C/D architecture.
Reinforcing the gradual rise of diesel in South Korea, despite the TDI scandal which has led to the recent jailing of an Audi Volkswagen manager, RSM offers the SM6 with four engines, one of which is the Alliance’s 1.5-litre dCi. The others are a 2.0-litre GDI, 1.6-litre turbo GDI and a 2.0-litre LPLi, LPG being a popular fuel in RK.
RSM stated at the start of production in January 2016 that it hoped to sell an average 50,000 units of the car per annum, which means the SM6 is exceeding expectations. December was not a good month for the Korean market in general, but still, the SM6’s 3,590 registrations exceeded those of a big name rival, the K5 (Optima in some countries). The D segment Kia sedan suffered a 58% year-on-year defenestration to 3,392 deliveries. The Chevrolet Malibu is another reason for that, its equivalent number being a 245 per cent YoY gain to 4,154 sales.
Backtracking for a moment to the SM5, L43, the third generation of this D segment sedan, is a rebodied Renault Laguna. It is therefore way overdue for a successor, especially as it has been built at Busan since December 2009.
The Renault Latitude (Safrane in some markets) was closely related to the SM5 and built alongside it. A facelifted model was launched in Korea in November 2012. In July 2014, RSM added a 1.5-litre diesel engine to the SM5 range. There was another update in January 2015.
RSM was at one time due to ship a variant of a fourth generation model to the US and Canada for sale there as a Mitsubishi. This would have been sold as a new Galant but the project was axed.
There will not be a successor for the Renault Latitude/Safrane, a Renault spokesman told just-auto.com in March 2015, nor will there be an equivalent SM5 replacement, it is thought. The car remains on sale in South Korea but just 435 were sold in December, a drop of 85 per cent. The SM6 is the effective successor and SM5 production will soon end.
Will RSM add an SM4 and, eventually, a new SM5? It is possible, if the SM3 model name is used for the Clio, and the Mégane Grand Coupé becomes the first ever SM4. Maybe the SM5 badge will be revived, newly applied to a Mégane five-door hatchback. We shall see.
There is no model name gap above SM6. That is because an E-segment sedan, Samsung’s largest car, exists. The L47 series SM7 has been in production at Busan since July 2011 and its basis is the aged Renault P5 platform. That’s right, this architecture is not an Alliance one, which shows how long it has been around in one form or another. Prior to this, an even more aged architecture was employed for the previous SM5, the car which the Busan plant was erected to manufacture. This first generation car was a restyled Nissan Cefiro. Production started in 1998 but stopped abruptly when its maker went bankrupt in 1999, only to recommence in September 2000 and continue until 2005. Nissan’s connection with the original Samsung Motors predated any Renault involvement for either firm.
Back to the SM7. This is a rival for the Kia K7 (Cadenza) and the even more recently launched Hyundai Grandeur (Azera in the US, Canada and certain other countries). Sales for 2016 were down by 16 per cent to 7,150 cars, meaning that next year’s replacement should ideally be brought forward.
Renault Samsung also built a version of the SM7 for Renault until 2016. This car, the previous Talisman, had its global debut at the Beijing motor show in April 2012, going on sale in China two months later. A facelifted SM7 went on sale in South Korea in September 2014.
The third car to be badged SM7 will use the Renault-Nissan Alliance’s CMF (Common Module Family) architecture. This next model might also be rebadged as an E segment Renault sedan for a handful of countries.
None of the places where a Renault version of the SM7 due out in early 2018 would be in Europe, not even France. Time and again, the Renault brand has not been able to command premium prices for a sedan of this size against the likes of the Mercedes-Benz E-Class and Audi A6. However, in Russia, some states in the Middle East and China, a new generation model possibly called Safrane or Latitude might sell at the rate of a combined 5,000-7,000 units a year.
Finally, now to SUVs, an area where RSM has really made big gains in the last couple of years. The current line-up consists of the QM3, which is an imported Renault Captur, and the QM6, a Busan-built version of the Koleos.
The rebadged Captur was released in South Korea during December 2013. It is built in Spain on the same line as the Renault at Valladolid. The QM3 had its debut at the Seoul motor show in March 2013.
In common with other Samsungs, one unusual thing about this small SUV is the option of diesel power. It is incredible if HMG simply failed to see the potential for B-SUVs in its home market. Further, if Kia Motors did envisage such a trend and was not allowed to develop and launch a vehicle ahead of HMC, then the parent company has made a huge error.
The SsangYong Tivoli is the segment leader amongst B-SUVs in RK with sales of 57,000 units in 2016. The real irony for Hyundai Motor Group being humiliated by foreign-owned SsangYong is that both Hyundai (Creta) and Kia (KX3) build and sell B-SUVs quite successfully in other countries. Each is now racing to get such models into production in both South Korea and Europe. The existing models made in China, India and Russia are not easily adapted for relevant crash and emissions laws, however.
The Tivoli being far and away the best performer in its class is largely due to how well the timing of its appearance was. The Chevrolet Trax is a few years old now, as is the QM3. A facelift in 2016 would have really helped Renault Samsung but for some reason, Renault did not launch one in Europe. This means that the Captur is now almost four years old (it will be in March) and still no styling or all important multimedia system updates. No surprise that sales collapsed all over Europe during the second half of 2016 and are falling still.
RSM stated in December 2015 that 41,651 QM3s had been sold since the vehicle’s launch in December 2013. In CY2016, only 15,280 were sold, a YoY drop of 38 per cent. How frustrated Renault Samsung’s management and product planners must so often be with their overlords in Paris. Groupe Renault would do well to listen to what those in South Korea are asking for, and not blame RSM when easily avoidable disasters such as the plunge in QM3 sales occur.
Let’s instead presume that things have already improved and we are yet to see the results. That would mean a facelift for the QM3 at the Seoul show, only a few weeks after the arrival of an identically updated Captur at Geneva in early March. Renault needs to get that car into production at Valladolid toute de suite and Samsung QM3s rolling onto ships bound for the port of Busan equally quick smart.
The second generation Captur (project code: HJB) is expected to be revealed at the 2019 Geneva motor show. It should ride on the CMF-B architecture as introduced by the fifth generation Nissan Micra/March. The latter car has just gone into production. The next Samsung SM3 should have its premiere at the 2019 Seoul motor show. The cars’ mid-cycle facelift would be in the fourth quarter of 2022 and the third generation models should then appear in early 2026.
RSM’s largest SUV is the QM6. It serves as the replacement for the QM5 and is the same vehicle as the Renault Koleos. The Samsung was first seen at the Busan motor show in June 2016, going on sale in South Korea three months later. Both models were developed at the Yongin-based Renault Samsung Technical Center in South Korea’s Gyeonggi province.
Renault Samsung has responsibility for the second generation Koleos and QM6 and these vehicles should go on sale from early 2023. That would be near enough to three years exactly after the existing models’ facelifts are launched. An evolution of the Alliance CMF-C/D should be the platform for the Koleos 3/QM6 2 twins.
Will there be another SUV joining the Samsung range between the QM3 and QM6? It seems a logical thought that a renamed Renault Kadjar could be launched in South Korea later this year. QM4 or QM5? That remains to be seen but the latter would of course be the best option for RSM in that it could theoretically command higher pricing with a higher digit in the model name.
Electric vehicles?
As for EVs and PHEVs, Samsung has some history but at the moment, there are no such vehicles in its line-up, nor do there seem to be any publicised plans for fresh models.
The SM3 Z.E. is now out of production, not having sold terribly well. A prototype of this electric variant of the SM3 was revealed by RSM in November 2010. Limited production was due to commence in 2012, the company claimed at the time. The test vehicle featured a quick-drop battery system.
In November 2011, RSM stated that its target for calendar 2012 production of the EV version of the SM3 was 250 cars, with up to 13,000 plug-in variants to be built by 2015.
The company displayed a modified version of the Renault Fluence Z.E. at the Busan motor show in May 2012. This car, the Samsung Z.E., would be launched in the South Korean market in 2013, the company stated at the Busan show. Its premiere in production form was at the Seoul motor show in April 2013.
The SM3 Z.E. would be launched in October, the company stated in July 2013. Production did indeed start in October, with 4,000 cars a year planned to be built at Busan. Renault ceased building the Fluence Z.E. in November 2013. This was due to low sales.
It is entirely possible that limited imports of the Zoe could commence but the local market doesn’t seem to have much of an appetite for plug-in cars. Kia Motors built 2,500 units of its A segment Ray EV between December 2011 and 2015. All these cars were for civil servants in South Korea as part of a large test programme. If the Hyundai Ioniq and Kia Niro start to sell at decent levels, then no doubt RSM will soon be talking to its parent in Paris about bringing in either the existing Zoe or a potential second generation car which may appear in 2020.
Summary
Renault Samsung, which was created out of the ashes of the bankrupt Samsung Motors, has come a long way in a relatively short period of time. Once infamous for being a notorious example of an overly ambitious and debt-riddled Korean car industry, the Groupe Renault subsidiary may yet become far more than the self-funding outpost in Busan that the parent company initially saw it as.
The firm’s only plant was built as a money no object manufacturing centre in 1998 during the maddest days of the South Korean bubble economy – pre Daewoo Group collapsing with debts of the the equivalent of US$70bn – so it is a factory with lots of opportunity for expansion.
Once lampooned for the news that it was steadily sinking into the soft soil of the Nakdong River delta near what is now called Busan, formerly Pusan, the equally infamous emergency jacking up operation and 60,000 new concrete piles is long since forgotten. The fantastic legacy – and eventually the cracks and leaks were stopped with yet more repair work – is a Nissan-designed manufacturing site which was planned to offer half a million units of annual capacity.
Busan should eventually prove to be a major asset in the Renault-Nissan-AvtoVAZ-MMC global manufacturing matrix. As long as the won settles down and becomes less volatile in its movements versus the euro, US dollar and other relevant currencies for RSM’s imports and exports, Renault Samsung may one day become a true cornerstone of Groupe Renault’s global sales and manufacturing reach.
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