Renault Korea Partner Company "Export Support Needed for Survival"

[Asia Economy Reporter Yoo Hyun-seok] The Renault Korea Motors Partner Companies Council issued an appeal on the 12th urging the government, Busan City, and the local business community to establish export support measures in response to the crisis facing automobile exports.

In the appeal, the council stated, "Over the past three years, we have overcome many issues such as COVID-19, semiconductor parts shortages, rising raw material prices, and the Ukraine war," but also diagnosed that "the competitiveness of automobile exports is now in crisis due to export logistics costs that have more than doubled recently."

The council emphasized that, in addition to existing export support policies, the government needs to implement active export logistics support measures for domestic automobile manufacturers and parts partner companies that do not have dedicated shipping lines.

Renault Korea Motors, the largest export company in the Busan region, and its parts partner companies account for 15-20% of the local export economy. Despite difficult conditions last year, they achieved a total export volume of 117,020 units, a 63.3% increase compared to the previous year.

However, there is growing concern that the sharp rise in logistics costs could lead to weakened export competitiveness this year. In the worst-case scenario, the council predicted that the increase in logistics costs could weaken price competitiveness, causing the European sales volume of the key export model XM3 to shift to European factories.

The council stressed, "Unlike the top two domestic automobile companies that have secured dedicated shipping lines for automobile exports, we are in a situation where we must continue to find export vessels at high freight rates with great difficulty," and added, "Given the current high-cost export competitiveness situation, securing future European export volumes is not guaranteed."

They continued, "Although our government is also taking steps to support export logistics, domestic automobile companies without dedicated shipping lines cannot resolve the burden of high freight rates and stable vessel procurement," and said, "More proactive export logistics support measures from the government are urgently needed."