Renault Korea Motors to boost exports with newly systemized containers

Industry

Published: 18 May. 2023, 18:01

Renault Korea Motors to boost exports with newly systemized containers

Renault Korea Motors' Arkana SUVs are being loaded into a shipping container at the French carmaker's plant in Busan on Wednesday. [RENAULT KOREA MOTORS]

BUSAN — Arkana SUVs are lined up in front of a massive shipping container Wednesday afternoon at Renault Korea Motors’ manufacturing plant in Busan.

After taking photos of the cars, a Renault employee gets in and reverses the car into the container. With three cars per container, the Arkanas are now ready to be moved to the Busan Port and then shipped to France.

Unexpectedly they will not be shipped using pure car carriers, vessels designed specifically for the transport of passenger cars in extremely high quantities, but instead with general container ships.

This is Renault’s new way of exporting their vehicles, and a boost in recovery for the export world after the Covid-19 pandemic seriously hit the global logistics chain.

An Arkana SUV is being loaded into a shipping container at the French carmaker's plant in Busan on Wednesday. [RENAULT KOREA MOTORS]

“We ran through a series of demonstrations to fix the cars safely into the containers, which helped proved there would be no serious damage to the quality,” said Lee Seon-hee, head of logistics at Renault Korea Motors’ Busan plant, during a press tour on Wednesday.

“Bigger automakers have their own logistics route like how Hyundai Motor has Hyundai Glovis,” Lee said. “But smaller manufacturers like Renault, have had to find alternatives to overcome the logistics crises.”

There were 770 car carrier vessels across the world before the pandemic, but the number now stands at 750, according to data from the Ministry of Oceans and Fisheries, as several of them were decommissioned due to decreasing shipbuilding contracts and tightening environmental regulations.

Lee Hae-jin, head of manufacturing at Renault Korea Motors, talks during a press conference at the French carmaker's plant in Busan on May 17. [RENAULT KOREA MOTORS]

Fewer carriers meant higher charter rates. The price for chartering a carrier vessel with a 6,000 CEU capacity, or the capacity to carry 6,000 cars, per day skyrocketed to around $100,000 in the second half of last year compared to $20,000 in 2021.

Currently, Renault Korea Motors fills 25 containers a day, or 75 units. Beginning in April, the system sent a total of 1,500 Arkanas to France, around 10 percent of its export capacity.

The new export process also reduced the overall cost by around 10 percent.

“We can store the produced cars in the containers and move them to Busan Port right away instead of paying more to find the means to carry them to the port,” Lee said. “It’s a geographical advantage of our Busan plant, which is only 10 kilometers [6.2 miles] away from the Busan Port.”

Renault Korea Motors believes the new method will increase its exports and make the Busan plant a key export hub for the French carmaker.

Renault exported a total of 7,779 cars in April, down 98.1 percent compared to the same month last year, and down 40.1 percent when compared to March.

Of the total export volume, Arkana SUVs account for 95 percent.

Renault Korea Motors' Arkana SUVs wait in line to be loaded into a container at the French carmaker's plant in Busan on Wednesday. [RENAULT KOREA MOTORS]

“The Busan plant has two particular advantages, one is we are very good at adaptation,” Lee Hae-jin, head of manufacturing at Renault Korea Motors.

“The second is, it has all the capabilities and equipment to produce various models in a facility,” Lee added. “It can produce seven models simultaneously.”

High quality is also an edge, Lee said, adding that vehicles made in the Busan plant are No. 2 in terms of quality of all vehicles made in a total of 21 manufacturing plants Renault operates across the world.

“We never compromise on quality, and this also applies to every single employee working at the Busan plant.”

Luca de Meo, CEO of Renault Group, visited Korea in October and promised millions of euros of investment in Korea over the next six years.

“Renault's Busan plant will be the key export hub for our mid- to large-sized vehicles,” Meo said. “For that, Renault Group is willing to invest hundreds of millions of euros in Korea for the next six years.”

Renault Korea Motors' Arkana SUVs ready for export [RENAULT KOREA MOTORS]

Renault Korea Motors' latest focus on the Korean market came as it changed its name from Renault Samsung Motors in March last year.

In 1994, Samsung established Samsung Motors, which was acquired by France's Renault in 2000 following the 1997 Asian financial crisis. Renault agreed to include "Samsung" in the company name and paid 0.8 percent of annual sales to Samsung for the use of the name. That contract ended in August 2020.

Renault Korea Motors is currently developing a new hybrid model with Geely Holding Group with the aim of commercialization in 2024. The vehicles will be solely manufactured in the Busan plant.

Geely is Renault Korea Motor’s second-largest shareholder with 34.02 percent, after Renault Group BV, a Dutch subsidiary of Renault Group. Geely also owns Sweden’s Volvo Cars.

BY SARAH CHEA [chea.sarah@joongang.co.kr]