Why Renault bets big on Polestar’s Busan production

Renault vehicles are transported for shipping at the Port of Busan. (Renault Motors Korea)

Swedish electric-vehicle maker Polestar recently announced its plan to produce the new all-electric Polestar 4 at Renault Korea Motors’ Busan plant in 2025.

The new partnership comes as Polestar, a spinoff from Volvo in 2017, is seeking to secure a bigger footing in the burgeoning EV market with a more diversified product lineup from the Polestar 2 sedan and the Polestar 3 sport utility vehicles to the latest Polestar 4 coupe-styled SUV.

At a time when it is crucial to beef up its production, especially for sales in North America and Korea, the carmaker decided to team up with Renault’s Busan plant.

“Located with direct access to exporting ports, the Busan plant has 23 years of experience in vehicle manufacturing and about 200 employees,” Polestar CEO Thomas Ingenlath said upon the partnership announcement in November.

Established in 1997, the Busan plant has a production capacity of 300,000 vehicles per year and boasts the lowest defect rate of 0.15 per car among Renault’s 20 factories around the world.

“When the plant produced Nissan’s Rogue crossovers for exports to North America in 2014-2020, it secured 50 percent more orders than planned,” said a Renault Korea official. “Adding to the car’s upbeat sales, the Busan plant showed better quality even compared to those in the US and Japan.”

Another distinctive feature of the Busan plant is its “mixed production line,” where a single assembly line can produce multiple models regardless of engine type. Seven different cars – SM3, SM5, SM6, SM7, QM6, SM3 ZE and the Nissan Rogue – were produced on one production line in 2016-2019.

The planned production of the Polestar 4 suggests the French automaker’s strategic goal that goes beyond simply improving manufacturing output.

“While Renault Korea is accelerating its electrification efforts, it aims to harness its own expertise from its partnership with the premium EV maker both in production and quality management,” the Renault official said.

Renault Korea has big plans for the coming years, with the Aurora 1 hybrid project in 2024 and a brand-new EV project in 2026.

The carmaker is also committed to sharing growth with the local community. In May, it signed a memorandum of understanding with the Busan city government, parts makers and research institutions to navigate the port city’s future automotive industry.

By Mun So-jeong(munsojeong@heraldcorp.com)