Renault Samsung Motors, the South Korean subsidiary of the French carmaker, is the least successful of the South Korean domestic automakers, the brand has struggled in recent years because of bland and uninspiring products, but is going through a transition period, with the restructuring of its sales network and product offering.
Renault Samsung was once the number two brand in its home market, behind Hyundai-Kia, but has been passed in recent years by GM Korea (the former Daewoo now turned Chevrolet) and SUV maker SsangYong, owned by Mahindra & Mahindra of India, as sales of Samsung branded vehicles have fallen almost 60% in two years time, from 161.917 in 2010 to just 65.691 in 2012.
Its main competitor Hyundai-Kia, with a local market share of over 75%, exports to countries all over the world, and has economies of scale to undercut Samsung’s prices in its home market. And with a production of around 130.000 units in 2012 in a factory with a capacity of 300,000 units annually, it’s hard to make a profit.
Bright future for Renault-Samsung?
But a change of fortune may be in the making.
The recent successful introduction of a Samsung branded version of the Renault Captur, named Samsung QM3, looks hope giving. The first 1.000 units of the small SUV were sold out in 7 minutes, with another 4.000 orders signed in the following two weeks. It is the first Samsung vehicle not built in South Korea, but that may change if sales remain strong, as shipping costs from Europe and import duties in South Korea make it hard to turn a profit on these sales. [Read more…]