With hot models, Renault Samsung has good 2014

Renault Samsung Motors is steadily recovering sales in Korea as new models like the QM3, QM5 Neo and SM3 Neo are gaining popularity for their designs and fuel efficiency.

Last month, the Korean unit of the French automaker Renault managed to escape the bottom rank in the domestic market, beating Ssangyong Motor to take the No. 4 position for the first time since last December.

In April, RSM sold 6,153 units in Korea, up 35.7 percent from a year earlier, which was the largest growth among local automakers and its highest monthly sales figure in 2014. For the first four months, the automaker sold 21,062 units, up 21.9 percent from a year earlier.

For RSM, this is a promising start to meeting a goal set by Renault-Nissan Alliance Chairman Carlos Ghosn.

During his visit to Korea last month, the celebrated Ghosn said that RSM should be the No. 3 player in the Korean market and raise revenue by 70 percent by 2016. Last year, the company earned a revenue of 3.3 trillion won ($3.2 billion).

RSM said that its recent performance was led by the QM3 compact sport utility vehicle, which was introduced last December. From January to April, 2,334 QM3s were sold and RSM said that more than 17,000 orders are waiting to be filled.

The QM3, known as the Renault Captur overseas, is manufactured in Spain so RSM has to negotiate with Renault headquarters about the volume of imports. The company is currently supplying around 2,000 QM3s per month, but apparently this isn’t enough to meet local demand.

“We planned to sell 15,000 QM3s this year, but with this pace of pre-orders, it will be easy to surpass that goal,” said a spokesman of RSM. “The critical part is whether we can secure enough volume from Spain since this model is also popular in Europe.”

The automaker is also happy with the success of its upgraded QM5 midsize SUV and SM3 compact.

Under RSM’s commitment to a new family look, the most noticeable changes in the so-called Neo models is a front grill that is stretched to the headlamps with the RSM logo in the center. A few interior features have also been changed.

With a more stylish look, the QM5 sold 3,548 units in the first four months, up 195.2 percent from a year earlier. The QM5 Neo was released in late January.

RSM expects that as vacation season approaches, sales of the QM5 Neo will surge. In order to meet the varied tastes of consumers, the automaker said it added luxury trim on the gasoline-fueled QM5. The gasoline-fueled QM5 accounts for around 20 percent of total QM5 sales.

The company now hopes the SM3 Neo will be as popular as the QM5 Neo. The compact, which was released last month, has received a design upgrade in its head and tail lamps. It is also equipped with more features than regular SM3s such as Hill Start Assist, which prevents cars from sliding backward on a hill when drivers start them up.

“Renault Samsung’s design revolution, which was proven in the QM3 and QM5 Neo, is really noticeable in the SM3 Neo,” said RSM CEO Francois Provost in a release. “It will be more successful than those two models as it can hook young customers that care about style and practicality with superb fuel efficiency and comfort.”

RSM said that as of last week, it has received more than 1,700 pre-orders for the SM3 Neo. It has been also reinforcing marketing for customers in their 20s and 30s using the term “Some,” an abbreviation of the word “Something,” which is widely used by young people to express the chemistry between a man and woman.

“We expressed SM3 Neo’s image as a feeling that people can have when they start to love and it seems consumers’ response is good,” said Joo Soo-yeon, director of RSM’s marketing.

So far, the company’s only disappointment is sales of its ordinary SM5. The midsize sedan’s sales dropped 25.9 percent year-on-year to 7,524 units for the first four months. However, RSM hopes it can make a rebound when the diesel-fueled SM5 comes out in the second half of this year.

Meanwhile, RSM said yesterday that Renault Group has formed a strategic alliance with LG Chem, Korea’s largest chemical company, for development of lithium ion batteries used in electric vehicles. RSM currently makes the SM3 Z.E., the only sedan-type electric vehicle sold in Korea.

BY joo kyung-don [kjoo@joongang.co.kr]