Supply problems following the Japanese earthquake have prompted Renault Samsung to source more automotive components locally, operations head Jean-Marie Hurtiger has said.
The remarks came as Japanese and other foreign carmakers increasingly are turning to South Korean parts makers as Japanese suppliers reel from the strong yen and face a potential risk of natural disasters, Reuters noted.
Go deeper with GlobalData
Renault Samsung Motors, which imports some powertrain parts from Japan, was forced to reduce production volume at its Busan plant by about 20% due to supply chain disruptions in Japan.
In May, it normalised production as Japan’s parts crisis eased, but saw its domestic and export sales drop 9% in the first half partly because of a production loss.
“What we continue to do is… to localise as much as we can in Korea, provided that Korean suppliers are competitive, which is most of the time the case,” Hurtiger, CEO and representative director of Renault Samsung Motors, told Reuters.
He said the company sought to localise all powertrains.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“This is what impacted us in terms of the yen /won exchange rate in the past and what impacted us in the tsunami for instance,” he said. “So I think this is a critical and priority task for us.”
The news agency said a media report in February said alliance partner Nissan Motor wanted to boost its purchases of South Korean parts 40 times to KRW2 trillion (US$1.9bn) in 2013.
Without confirming the report, Hurtiger told Reuters: “This makes sense… The strong yen has pushed Nissan to come to South Korea for parts.”
Hurtiger also said Renault Samsung was considering introducing a new shift scheme at its Busan plant to extend production.
“It is not exactly a three shift, it is something in between… so the day the volume reaches 300,000 mark we will be able to switch to a higher mode,” he said.
But he advised caution on expanding production capacity at Busan, saying it needed “study.”
Busan, with annual production capacity of 300,000 vehicles, exports Renault or Nissan brand cars to the Middle East, China, Russia, South America and Europe. Products include Nissan’s Sunny and Almera and Renault’s Fluence and Latitude.
