"If Price Competitiveness Isn't Raised to Spanish Levels..." Renault's Bold Move

Loz Mojos, Renault Group Executive Vice Chairman, Sends Message to Renault Samsung Busan Plant Employees on the 9th

[Asia Economy Reporter Yu Je-hoon] Renault Group has warned the labor and management of Renault Samsung Motors that if the production competitiveness of the Busan plant is not raised to the level of the Spanish plant, it may consider a "new option." This means that the competitiveness of the Busan plant will be prioritized when allocating global new car production, and some interpret this as a statement that, in the worst case, withdrawal from the Korean market is also being considered.

As foreign-affiliated automakers such as Korea GM and SsangYong Motor have faced turmoil due to rumors and decisions of withdrawal by their parent companies over productivity issues, Renault Samsung is also facing a critical test. ▶Related article on page 14

Jos? Vicente de los Mozos, Executive Vice President of Renault Group, stated in a message sent to employees of the Renault Samsung Busan plant on the 9th, "If the (competitiveness enhancement) commitments that the Busan plant must fulfill are not kept, we will seek new methods."

Renault Samsung, recently facing management difficulties, is implementing a "Survival Plan (emergency plan)" focused on reducing fixed costs and strengthening profitability. However, the Renault Samsung labor union, which failed to conclude last year's wage and collective bargaining negotiations, has opposed this by approving a strike plan, escalating conflicts with management.

Vice President de los Mozos pointed out, "When I visited last year, the Busan plant promised to improve competitiveness to secure European export volumes of the New Arkana (XM3 export vehicle). Trusting that promise, I persuaded the group's top management to decide on production of European volumes at the Busan plant, but as of the end of last year, that promise has not been fulfilled." Renault Group decided in September last year to produce the New Arkana European export volumes at the Busan plant, but specific volumes have not been guaranteed.

He particularly emphasized that the Busan plant must achieve price competitiveness at the level of the Spanish plant. Vice President de los Mozos said, "The manufacturing cost per unit at the Busan plant is twice that of the Renault Captur produced in Spain, and considering transportation costs, producing vehicles in Korea and delivering them to Europe may not be appropriate, which the Busan plant employees must also be aware of. The New Arkana must be produced at the same manufacturing cost level as the Captur, and this is a responsibility the Busan plant must uphold."

He also presented three major tasks: top quality, production cost reduction, and on-time delivery, adding, "If competitiveness does not improve in an environment of overinvestment relative to demand, difficulties will be faced in the future."

This content was produced with the assistance of AI translation services.