Last month, its deliveries numbering only 6,175 vehicles, Renault Samsung slid down the Korean sales chart even further, dropping to position seven behind Genesis. What will majority shareholder (80%) Groupe Renault do about its subsidiary’s worrying decline?
It’s been a trying time for RSM over the last 12-24 months with the reasons for its fall many. And yet, as with GM Korea which finally seems to be back on its feet after an even more dramatic collapse, the core issue is and remains old models. Samsung also has too few SUVs in a market which has caught that fever, even though Korean buyers generally are still very keen on sedans and hatchbacks too.
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By GlobalDataIncluding exports of Renault- and Nissan-badged models, which make up the majority of output at RSM’s only plant, a greatly underutilised facility in the city of Busan, RSM’s sales plunged by 40% to 52,930 vehicles during the four months to the end of April. That compares to 87,996 units in the equivalent period of 2018.
One of the structural fixes which has needed to happen for some time is an end to the war with the labour union representing workers at the Busan factory. Over the years, this has blown variously cold, warm and hot. After eleven months of negotiations during which there had been 62 strikes and several production stoppages, on 16 May, company and union reached what appears to be a tentative accord on working conditions and pay rates.
RSM’s productivity is likely to get worse before it gets better due to the loss of a supply contract to Nissan North America for the Rogue. The final examples of this soon to be replaced SUV will be built at Busan in September, that deal accounting for some 80,000 units per annum of the plant’s 300,000 capacity. The model pictured above will serve as the effective replacement in terms of bringing back some volume to Busan after the loss of the Rogue, even though this vehicle, the future Samsung XM3 won’t be in production until the first quarter of 2020.
Cars
Samsung’s major weakness is in its car line-up: of the four models on offer, two, the SM3 and SM5, are close to a decade old.
The smallest sedan which the brand sells dates to 2009 so is therefore long, long overdue to be replaced. The SM3 successor will probably be out within months, now that Dongfeng Nissan and Nissan North America have revealed their new generation Sylphy and Sentra sedans respectively.
There’s no SM4, so the next model up is another ancient one, the Renault Laguna-based SM5. Its sales have understandably fallen away to low levels, just 995 cars having been delivered to Korean market buyers over the first four months. Production is likely to cease within months and no replacement is expected.
The way more modern SM6 fares much better than the SM5 but even so, 5,735 deliveries for the year to end of April are nothing to crow about. A facelifted car should be on sale early in 2020 with a successor expected in 2023. As with the current model, the next one will be twinned with the Renault Talisman’s replacement.
There is a question mark over what will become of the SM7, Samsung’s largest car. Until 2016, RSM built a version of this model for Renault which was sold in many countries as the (previous generation) Talisman. The SM7’s Korean market launch took place in 2011 so in theory it should be replaced during 2019. Some now believe that this project has been cancelled and that Samsung will withdraw from the E sedan segment.
SUVs & crossovers
Next year should bring several new SUVs for the Samsung brand, the smallest of which would be the second generation QM3. The current edition of that model is an import from Spain: this small SUV is more or less the same vehicle as the Renault Captur.
RSM revealed a preview of next year’s coupé-crossover at the Seoul motor show in March. The XM3 Inspire was a prototype which looked nearly identical to the Renault Arkana which had been revealed at the Moscow motor show in August 2018.
Production of the XM3 is due to start in March 2020 and should last for seven years with a facelift due after three and a half to four years. Renault Samsung will likely also export this model to other countries where it will be sold as the Renault Arkana. The XM3 will be Busan’s first B0+ platform model.
The second of Samsung’s existing two crossovers or SUVs is also its best seller. The QM6 got past the 10,000 mark (just) for the year to date on 30 April thanks to a surge of 42% during the most recent month, giving the division and the Busan plant some long overdue good news.
A facelift for this D segment SUV is due in 2020 and a successor in 2023. The Yongin-based Renault Samsung Technical Center in South Korea’s Gyeonggi province should again lead the development of the second generation model. As is the case with the current QM6, the new one should be twinned with the replacement for the Renault Koleos.
Electrified
RSM has been selling an EV for almost six years (or two EVs if you count the Twizy, a quadricycle). The SM3 Z.E. is pretty much the same car as the former Renault Fluence Z.E. A model with range extended by a claimed 57 per cent was announced by RSM in November 2017. This is thanks to the replacement of the battery pack with a 36kWh pack.
If there is a direct replacement for the soon to be discontinued SM3 Z.E. it would use the Renault-Nissan Alliance’s CMF (Common Module Family) architecture. Such a model seems highly unlikely though.
Will Renault export a version of next year’s plug-in hybrid Captur PHEV to South Korea and badge it as a Samsung QM3 PHEV? Neither company is saying at the moment but with the rising interest in EVs and PHEVs in RSM’s home market, it could certainly work as long as the exchange rate risk is mitigated.
Reports for many other manufacturers’ future models are grouped in the OEM product strategy summaries section of just-auto.com.
Future product program intelligence
More detail on past, current and forthcoming models can be found in PLDB, the future vehicles database which is part of QUBE.
The next brand to be featured as part of the Groupe Renault and Nissan Motor series will be Lada. This will be followed by Datsun, Venucia, Infiniti, Nissan and Mitsubishi. Alpine and Renault were the focus of the first feature in this series with the second report being about Dacia.
