Nissan is moving Rogue production from Japan to both the US and Korea, boosting global capacity for the compact SUV.
The Renault-Nissan alliance announced on Friday (20 July) it would spend US$160m to add 80,000 units of production at Renault Samsung Motors (RSM) in Korea “and increase cost competitiveness of a key industrial base”.
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Production in Busan will begin in 2014, with an annual capacity of about 80,000 units.
This year the plant aims to build about 180,000 vehicles for sale in Korea and 60 other countries. Capacity is 300,000.
“Plans continue as scheduled for moving Rogue production to Smyrna [Tennessee] as well in 2013, but with expected increased demand for the new model we anticipate needing additional global capacity,” Nissan Americas director of corporate communications, Travis Parman, told just-auto by email.
The US part of the move was heralded by Americas chief Carlos Taveres at the beginning of 2011 and mentioned most recently this year in a 28 June press release about Smyrna and Canton (Mississippi).
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By GlobalDataIn a statement, the alliance said next-generation Rogue production in Busan gives more momentum to Renault Samsung Motors, which earlier this year launched a ‘RSM 2012 Revival Plan’ which aims to achieve efficiency and cost competitiveness in Busan, while expanding RSM’s vehicle lineup, which today consists of four models.
“Adding production in Korea shows a commitment across the alliance to helping Renault Samsung Motors achieve its targets for cost competitiveness and growth,” said alliance chairman and CEO Carlos Ghosn. “The Busan announcement represents a unique ‘win-win-win’ for Renault, Nissan and RSM, demonstrating the flexibility and power of the alliance for all partners.”
As part of the revival plan,” RSM will introduce a new small crossover and the zero-emission SM3 ZE in 2013. RSM’s current lineup includes the SM3 compact, the SM5 midsize sedan, the SM7 large sedan (adapted for China as the Renault Talisman) and the QM5 SUV, which is sold as the Renault Koleos outside Korea.
Reuters noted that the Korean won’s lower valuation makes South Korea a more attractive export base and shipments to the United States and Europe would allow the alliance to benefit from South Korea’s free trade deals with those countries. The EU free-trade agreement has also helped Hyundai-Kia increase its presence in Europe.
The Rogue, essentially North America’s version of the Qashqai/Dualis, was Nissan’s second-best selling car in the United States after the Altima sedan last year. It is currently exported from Nissan Motor Kyushu, a Nissan subsidiary in Fukuoka Prefecture, southwestern Japan.
Reuters reckoned the South Korea export plan suggested Renault sees little hope of a short-term sales recovery for the 80%-owned RSM brand, which suffers from an ageing and limited model line-up domestically.
RSM has taken a drubbing from Hyundai-Kia, with its domestic market share falling by more than half to less than 5% within two years. The Hyundai and Kia brands’ combined share rose 4% to 82 percent over the same period.
Busan builds some Nissan-badged cars such as Sunny and Almera bound for markets such as Russia and the Middle East and Renault-branded vehicles for China, Europe and other markets.
The plant has cut production in recent months in the face of slumping sales in South Korea and overseas, partly as a result of lack of new models.
