Last Year's Mercedes-Benz Korea Performance Surpassed Renault Samsung

Last Year Mercedes-Benz Sales at 5 Trillion KRW, Renault Samsung Drops to 4 Trillion KRW
Sales: Mercedes-Benz > Renault Samsung for the First Time Since Entering Korea
Mercedes-Benz Rises to 3rd Place in Domestic Auto Industry by Operating Profit
Renault Samsung, Suffering from 380-Hour Strike, Shows Clear Performance Decline

[Asia Economy Reporter Suyeon Woo] Mercedes-Benz Korea's operating performance last year surpassed that of Renault Samsung Motors. While Benz Korea set a record high sales in Korea and increased its profits, Renault Samsung Motors suffered from strike troubles, missing out on both export and domestic markets.

According to each company's audit report on the 9th, Benz Korea posted sales in the 5 trillion won range last year, setting an all-time high record, while Renault Samsung fell to the 4 trillion won range. Last year, Benz Korea's sales were 5.4377 trillion won, up 21%, while Renault Samsung's sales dropped 16% to 4.6777 trillion won. It was the first time since Benz Korea entered the Korean market in 2003 that its sales exceeded those of Renault Samsung.

During the same period, operating profit also favored Benz Korea. Benz Korea recorded an operating profit of 218 billion won, surpassing Renault Samsung's 211.2 billion won. While Benz Korea set a new record with a 40% year-on-year surge, Renault Samsung received a gloomy report card with a decline of over 40%.

The main reason Renault Samsung fell behind Benz Korea was that it could not properly operate its factory due to over 380 hours of strikes last year. Production losses due to strikes last year alone reached 21,000 units. Production at Renault Samsung's Busan plant last year was 164,974 units, down 24% from the previous year.

The sharp decline in production at the Busan plant was due to a reduction in export volumes, which accounted for most of the performance. Due to frequent strikes at the Busan plant, Renault headquarters reduced the entrusted volume of Nissan Rogue from 100,000 units per year to about 60,000 units, causing production to drop sharply. As hourly production plummeted, Renault Samsung even resorted to voluntary retirement, but labor-management negotiations are still at a standstill.

As of the second quarter of this year, Renault Samsung's labor and management are still struggling to reach an agreement on last year's wage negotiations. Renault Samsung's labor and management are scheduled to meet again at the negotiation table on the afternoon of the 10th, but with the issue spreading to 'labor-labor (노노) conflict,' reaching an agreement is expected to be difficult.

In contrast, 2019 was a historic year for Benz Korea with a flood of new records. It set an all-time high sales record of over 78,000 units in the Korean market, approaching 80,000 units, and took advantage of competitors' hesitation to raise its market share in imported cars to the 30% range. Having dominated the imported car market, Benz Korea has now grown enough to compete with domestic car manufacturers in the Korean market.

In terms of profit, it has already surpassed the three domestic foreign-affiliated companies to rise to third place in the industry. Considering that Korea GM and SsangYong Motor have been posting losses every year, Benz ranked third in profit among automobile companies operating domestically last year, following Hyundai Motor and Kia Motors.