Renault Samsung's output to be halved next year after losing export orders

Output at Renault Samsung Motors Co. under French carmaker Renault S.A. is expected to become halved next year to require additional streamlining as the Busan-based Korean producer loses most of its work for overseas shipments due to dispute in Renault-Nissan alliance and waning productivity.

According to industry sources on Tuesday, Renault Samsung Motors notified its partner companies in Korea that its planned production of 130,000 units of the P33B, the next model of Nissan Motor Co.’s Qashqai, was cancelled. Allocation for crossover sport utility vehicle (SUV) XM3 for export also was scaled back to 50,000 units per year from original 80,000.

Renault Samsung has been striving to earn new orders from Renault Group to compensate for the void following Nissan’s Rogue exit. Rogue was responsible for half of 215,680 cars that rolled out from the Busan plant last year. The orders were scaled down to 60,000 this year and Nissan did not extend the contract beyond this year.

The new Nissan Qashqai was expected to be the replacement for the Rogue but the production plan was cancelled amid the ongoing row between its parent Renault and alliance partner Nissan. The relations between the two allies have further deteriorated this year due to spats over governance reforms and a failed deal to tie Renault up with Fiat Chrysler.

Renault Samsung Motors"s XM3

Samsung Motors from this month has cut output by a quarter and sent hundreds of redundant workforce at the 1,800-strong factory line on rotational leave.

Adding to woes, French headquarters has allocated the production of only 50,000 XM3 headed for Europe to the Busan plant, down 38 percent from the earlier plan. It is speculated that Renault’s plant in Valladolid, Spain, which has been competing hard to win the order, would take the remaining 30,000 orders.

Renault Samsung denied the news on the scale-down in XM3 export orders, saying talks with its parent company over the issue were still ongoing.

Given the poor outlook, Renault Samsung is expected to become mostly idle. It produced total 210,000 cars last year from its Busan plant, but total output is forecast to become more than halved to around 100,000 next year, when counting in 50,000 XM3 orders from October 2020.

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