"'Discounts' Alone Are Not Enough"... Le, Ssang, and Shwe Strive for New Car Launches and Feature Upgrades

[Image source=Yonhap News]

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] The three mid-sized domestic automakers?Renault Samsung Motors, SsangYong Motor, and Korea GM?that had previously employed sales strategies involving monthly discounts of several million won per model and interest-free installment events are revising their strategies this year by focusing on new car development and launches, as well as upgrading vehicle specifications. This is interpreted as a strategy to increase market share by satisfying customers’ higher expectations, amid rising sales of premium imported cars with superior driving performance and convenience features in Korea.

According to industry sources on the 23rd, Renault Samsung Motors, SsangYong Motor, and Korea GM plan to develop and launch various new vehicles this year, in addition to year-model updates of existing cars. First, Renault Group and Geely Holding Group reached a final agreement on mutual cooperation on the 21st to launch joint models for the Korean market. The joint models will be developed and introduced as new products tailored to Korean consumers’ preferences by Renault Samsung Motors’ research team, based on Volvo Cars’ CMA platform and the latest hybrid technology under Geely Holding Group.

To this end, Geely Holding will provide technical support centered at its R&D center in Sweden, while Renault Group will be responsible for vehicle design. The joint model is scheduled to be produced at Renault Samsung Motors’ Busan plant in 2024. Renault Samsung Motors also plans to launch a hybrid version of the export-successful XM3 (export name Arkana) in the domestic market this year.

SsangYong Motor will introduce new vehicles such as the electric Korando e-Motion and the mid-size sport utility vehicle (SUV) J100 (project name). SsangYong’s first electric vehicle, the Korando e-Motion, filled its entire production plan of 1,000 units for this year within a week after pre-orders began on the 11th. Although it is a compact SUV, with eco-friendly vehicle tax benefits and purchase subsidies, it can be purchased for the high 20 million won range.

The J100 (project name), whose design was unveiled in June last year, is in the final stages of development aiming for a launch as early as July this year. Recently, SsangYong has filed trademark applications for the J100 name candidates to secure trademark rights. In addition, SsangYong is preparing to launch the electric version of the J100, named U100, next year.

Korea GM will introduce the 2022 model Bolt EV and Bolt EUV this year. Furthermore, the Chevrolet Tahoe, the best-selling full-size SUV in the U.S. and Chevrolet’s flagship SUV, began pre-orders on the 12th. The Tahoe is priced at 92.53 million won, with the Dark Night Special Edition set at 93.63 million won. Additionally, the full-size pickup truck GMC Sierra will be launched in the domestic market this year.

Besides launching new vehicles, the companies are also enhancing the performance and convenience features of existing models. SsangYong Motor’s 2022 New Rexton Sports & Khan powertrain now meets the stricter Euro 6D Step 2 emission standards, reducing harmful substances such as nitrogen oxides (NOx) while improving performance and fuel efficiency. The existing nine convenience features have been expanded to sixteen. The New Rexton Sports & Khan has garnered strong customer response, securing 3,000 cumulative contracts within two weeks.

Following the rise of non-face-to-face interactions after COVID-19, Renault Samsung Motors, which introduced an in-car payment system allowing ordering of groceries and other items from inside the car, has added the top-tier Inspire trim and various convenience features to the recently pre-ordered 2023 XM3 model. Soundproof windshield glass is now standard to reduce wind noise, and a safety support call service has been included to enhance customer convenience and safety.

The industry views the new car development, launches, and vehicle specification upgrades by the three mid-sized automakers this year as a strategy to divert customers’ attention from imported cars and improve profitability. Last year, Renault Samsung Motors, SsangYong Motor, and Korea GM recorded domestic sales of 61,096, 56,363, and 52,492 units respectively, falling behind imported brands such as Mercedes-Benz (76,152 units) and BMW (65,669 units). An industry insider said, "Domestic customers no longer prefer cars just because they are cheap," adding, "As sales of premium and eco-friendly cars increase, the three mid-sized automakers are shifting their sales strategies from relying on discounts to focusing on new models, vehicle performance, and design."