April 19, 2024

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[THE INVESTOR] Renault Samsung Motors, the Korean unit of French automaker Renault Group, is likely to delay the launch of its next-generation SM3 compact sedan to 2019, possibly due to a lack of production facility. 

According to ETnews on March 15, the redesigned SM3 will not arrive until 2019 as the new model requires the automaker to install an additional assembly line at its Busan plant or even construct a new facility. 

A Renault Samsung Motor spokesperson was unavailable to comment on the matter. 

At the moment, Renault Samsung rolls out 260,000-270,000 vehicles annually, including its popular SM6 and QM6 models, at its Busan plant. If the carmaker decides to introduce a new model, the expansion is inevitable at the plant which is running at the full capacity of 300,000 units.

According to industry sources, Renault, instead of pouring billions of won to install an additional line, would likely wait for a few years to start producing the new SM3 cars, when the production level of SM6 and QM6 decreases.
Delay of the new SM3, however, means it will lose further competitiveness in the local compact sedan segment. The current model, which is based on the second-generation launched in 2009, is already outdated
and requires an update, industry watchers say. 

Last year, SM3 sold 8,880 units, lagging far behind its rivals in the segment. Hyundai Motor Avante topped the ranking by selling 93,804 units, followed by Kia Motors K3 with 36,854 units and GM Korea’s Chevrolet Cruze with 10,847 units. 

There have been many reports that the Renault Megane sedan will likely replace the next generation SM3, but Renault Samsung head Park Dong-hoon has denied the speculations.

By Ahn Sung-mi (sahn@heraldcorp.com)