Renault Samsung Motors will start selling a revamped version of its SM3 compact car in the second half of this year to help cope with slumping domestic demand.

The company said it will unveil the 2-litre model at an auto industry fair in the southern city of Busan next week.

Renault Samsung SM3 is based on the Renault Megane III.

The company has been hit by a decline in vehicle sales and it posted an operating loss of KRW42.3bn (US$37.8m) in 2009, compared with a profit of KRW134.3bn the previous year. Renault Samsung’s sales dropped 3.7% from a year ago to 189,813 vehicles.

Renault Samsung, which also produces the Nissan Teana and Renault Laguna-based SM5 sedan, has also been hurt by the strength of the Japanese currency because it imports most of its parts from Japan.