[EXCLUSIVE] Renault Korea begins exporting QM6 SUVs to Mongolia

Industry

Published: 11 Jul. 2023, 16:07

[EXCLUSIVE] Renault Korea begins exporting QM6 SUVs to Mongolia

Renault cars are parked waiting to be exported at its Busan plant. [RENAULT KOREA MOTORS]

Renault Korea Motors started exporting its QM6 SUVs to Mongolia, a market largely dominated by Japanese carmakers, as the Korean arm of the French carmaker tries to find new export partners to combat a sales slump.

Dozens of QM6s manufactured in the automaker's factory in Busan are already hitting Mongolian roads.

“Renault Korea Motors inked a contract of exporting around 100 QM6 SUVs to Mongolia this year, and around 80 of them are already shipped,” said a source with knowledge of the matter.

“The export volume is expected to be some several hundred next year,” the source added without giving exact data.

Busan is the sole overseas manufacturing site for QM6s, or Koleos. Built in 1997, the Busan plant produces internal combustion engines for models including the XM3, QM6 and SM6. Its annual capacity stands at 300,000 units.

Mongolia is traditionally considered the stronghold of a few Japanese carmakers. The East Asian country is 100 percent dependent on foreign automakers as it does not have manufacturing plants.

As of Sept. 2022, around 76 percent of all vehicles in Mongolia were Japanese brands followed by German brands, which made up 7.3 percent, according to Korea Trade-Investment Promotion Agency (Kotra). Korean brands only accounted for 2 percent.

The QM6 SUV [RENAULT KOREA MOTORS]

The export was achieved by directly connecting with Mongolian car dealers, the source said, instead of using the traditional sales network Renault had in the country.

“Renault is exerting all efforts to increase exports,” the source said. “QM6s are suitable for Mongolia where drivers struggle with bumpy roads and a lack of infrastructure.”

Renault has been in a tight position since 2019, with domestic sales dropping and the end of the contract production of Nissan’s Rogue SUV. Rogue production had accounted for more than 70 percent of outgoing shipments from its Busan factory.

The carmaker has been filling the gap by increasing exports of other models, particularly the QM6s and XM3s. It exported a total of 52,577 vehicles in the first half, up 5.3 percent on year.

Domestic sales dropped 53.2 percent to 12,270 vehicles.

Renault Group CEO Luca de Meo visited the Busan plant in October and promised millions of euros of investment to make Korea a key export hub for the carmaker.

In July, Guido Haak, executive vice president of Renault Group, announced that the company will begin manufacturing EVs at the Busan plant when he met Busan Mayor Park Heong-joon in France. The mayor was in Paris to promote his city's bid to host the World Expo.

Haak pledged a large investment in order to manufacture 200,000 EVs at the Busan plant, although details were not disclosed. The investment size is expected to be about 1 trillion won ($774 million), according to Korean media outlets.

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