Renault Samsung Takes a Breather as XM3 Smoothly Exports to Europe

Remaining Variable is Semiconductor Supply Shortage

[Asia Economy Reporter Yoo Je-hoon] Renault Samsung Motors is breathing a sigh of relief as exports of the XM3 (known as the 'New Arkana' in Europe) to Europe perform well.

According to the Korea Automobile Manufacturers Association (KAMA) on the 24th, a total of 9,451 units of the XM3 were exported last month, ranking 4th in the domestic model export rankings. Among the top 10 exported models, the only ones not from Hyundai Motor or Kia were the XM3 and the Trailblazer (Korea GM).

The coupe-style sport utility vehicle (SUV) XM3 is a key model that will determine Renault Samsung's future direction. Since the suspension of Nissan Rogue contract production, Renault Samsung has suffered from a lack of work, making the XM3's success in overseas markets the only lifeline for survival.

Of course, the situation was not optimistic until early this year. Renault Samsung posted a loss of 79.7 billion KRW last year alone and, with sluggish domestic sales, cut its production target this year by about 30%, from 157,000 units to 100,000 units.

In response, Renault Samsung has been carrying out a 'survival plan' restructuring since the beginning of the year to trim excess. This led to ongoing conflicts between labor and management over wages and collective bargaining, causing significant production difficulties.

However, with sales expanding to major European countries in April and to 28 European countries from June, Renault Samsung's sales performance has greatly improved. Renault Samsung's cumulative exports from January to September this year reached 47,749 units, a 165.8% increase compared to the same period last year, with the XM3 accounting for most of this, exporting 37,781 units, a 36,227% increase.

Industry insiders expect that if the XM3's export momentum continues, about 60,000 units will be exported by the end of the year, partially compensating for the previous Nissan Rogue contract production volume (approximately 100,000 units annually).

The variable is the global shortage of automotive semiconductors hitting the finished car industry. According to major foreign media, Renault Group recently increased the estimated production disruption due to the semiconductor shortage to 300,000 to 400,000 units. An industry official said, "As production volume expands, Renault Samsung, which had been relatively unaffected by the semiconductor shortage, is beginning to feel the impact," adding, "Meticulous inventory management is crucial to ensure that the export boom is not broken by the external shock of semiconductors."