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| The Renault new Arkana / Courtesy of Renault Samsung |
By Nam Hyun-woo
Renault Samsung, the Korean unit of Renault Group, will manufacture the XM3 small SUV for the European market here, a crucial deal for the company's sustainability.
In an online event, Renault Group announced Wednesday (KST) that Renault Samsung will export the XM3 to European and other global markets from next year after producing the vehicle at the latter's Busan plant.
The XM3 will be named the new Arkana and will be available in hybrid and 1.3-liter turbocharged gasoline models. The company will target France, Great Britain, Italy, Spain and Germany for sales of the new car, and will expand this to Chile, Japan and Australia afterwards.
The new Arkana is different from the Arkana, available only in the Russian market, in terms of platform, engine and multimedia systems, Renault Group said.
The announcement is important news for Renault Samsung. It was facing serious sustainability questions as its contract to manufacture the Nissan Rogue for export ended in March.
The Nissan Rogue accounted for nearly half of the Busan plant's output, and more 100,000 vehicles were exported annually from 2015 to 2018. Renault Samsung sought to fill the production void by winning a manufacturing order for the XM3 for shipment to global markets.
Renault Group was expected to decide on the allocation of XM3 production last year, but postponed its decision over concerns to about the Busan plant's plunging productivity amid Renault Samsung's rising labor costs and prolonged strikes over wages.
While the headquarters delayed making a decision, Renault Samsung launched the XM3 here in March, and sales hit their stride with 22,252 sold in the first half.
Industry officials said COVID-19 also affected the headquarters' decision, as the Korean automobile industry remained relatively intact from the pandemic.
Renault Samsung said the decision came after domestic customers highly evaluated the quality of the vehicle, and Renault Group also acknowledged that the company's production capability was also competitive.
"The group's decision is the first step toward the XM3 becoming Renault Samsung's main export model," Renault Samsung CEO Dominique Signora said in a statement. "The volume of XM3 exports depends on how we can improve product competitiveness and satisfy global customers."
