New SM5 keeps Renault Samsung plant busier

BUSAN ― Resounding with K-pop music, the production lines at Renault Samsung Motors’ Busan plant were full of energy Friday.

With the recent launch of its new SM5 sedan, the Korean unit of the France-based Renault Group resumed overtime work at the factory last month for the first time in 11 months.

“After a long time, the new SM5 is revitalizing factory workers here. We have continued working overtime since November,” said Oh Jik-youl, manufacturing chief of Renault Samsung. 

Amid an almost 40 percent decrease in car sales, the Busan factory also suffered this year.

Production was suspended for 16 days between March and July and a voluntary retirement program was carried out in September.

For the ailing carmaker, a flicker of hope comes from the newly launched flagship model SM5, which used to be the best-selling car in the nation’s mid-sized sedan segment in the early 2000s.

Largely driven by the car’s positive sales, day-shift workers started working for one hour longer since Nov. 19, producing an additional 40 vehicles per day.

What makes this flexible operation possible, Renault Samsung said, is the factory’s unique system that produces and controls eight different car models on the same production line.

At the factory, SM3, SM5, SM7 and QM5 car bodies were moving on the same conveyor belt. At the end of the assembly line, they even carried different logos of Renault and Nissan for export markets as well as that of Renault Samsung.

The company said it had no worries about confusion in the production system as each car body moves together with its own parts kit. There were no parts shelves standing along the conveyor belt, as is common in other auto factories.

Adding to the factory’s dynamic production, Renault Samsung plans to produce 80,000 new Rogue crossover sport utility vehicles of Nissan, Renault’s alliance partner, from 2014 without major changes in existing facilities.

The Rogue cars will be shipped to North America, taking advantage of the Korea-U.S. free trade pact and a more favorable exchange rate here than in Japan.

“The Rogue production will secure both product quality and price competitiveness. That will pave the way for us to produce other Nissan vehicles in the future,” said Oh.

The manufacturing chief also hinted at the possibility of additional investment by Renault Group on the production of new-generation engines in Busan.

But he said it was too early to talk about expansion of production facilities considering the still-slowing sales.

Amid some signs of revival, Renault’s potential resumption of car production in China is expected to become a new threat to Renault Samsung, which has produced all Renault-brand vehicles for the Chinese market.

“Compared to Renault, which makes mostly small cars, we produce larger models. Chinese production would not affect our production,” he said, adding that no specific production plan in China has yet been confirmed.

Renault Samsung plans to produce 155,000 vehicles this year, only half its 300,000-unit annual output capacity. Oh predicted its car production would slightly increase next year for the domestic market while that for exports is expected to remain the same as this year.

By Lee Ji-yoon (jylee@heraldcorp.com)