Renault Korea to invest $1.1 billion to make EVs in Busan

Industry

Published: 18 Mar. 2024, 18:43

Renault Korea to invest $1.1 billion to make EVs in Busan

Renault Korea Motors CEO Stephane Deblaise, right, takes a photo with Busan Mayor Park Heong-joon after the two signed an agreement on investment to upgrade the automaker's Busan plant on Monday. [RENAULT KOREA MOTORS]

Renault Korea Motors may invest up to 1.5 trillion won ($1.1 billion) in its Busan plant by 2027 to accelerate its shift to electrification.

The automaker and the Busan metropolitan government on Monday signed a memorandum of understanding on the investment, including an immediate injection of 118 billion won to upgrade the facility.

Under the agreement, Renault will replace old machinery with EV equipment over three years. About 200 new jobs will be created.

"We are in discussions with headquarters to produce Renault's EVs at the Busan plant," Renault Korea Motors CEO Stephane Deblaise said.

"If the negotiations succeed, Renault Korea will invest a total of 1.5 trillion won in Busan by 2027, including in the Aurora project."

Renault brand CEO Fabrice Cambolive inspects Renault Korea Motors' Busan plant. [RENAULT KOREA MOTORS]

The Aurora project is a Renault Korea Motors-led initiative to develop three new vehicles — two hybrids and a pure EV.

It is estimated that the whole project will generate 12 trillion won in direct production inducement effects and 90,000 indirect new jobs, according to Renault.

The first vehicle, a hybrid midsize SUV, is slated to be introduced in the second half of this year.

Renault Korea Motors' Busan plant has been selected as one production hub for Renault's "International Game Plan 2027” targeting global markets.

The plant, built in 1997, produces midsize SUVs including the XM3, QM6 and SM6. Its annual capacity stands at 300,000 units, and it employs around 2,000 workers.

Renault Korea Motors said last June that it would make a big investment in Busan to build an EV facility with a capacity of 200,000 units, planning to use the plant as an export hub.

The Polestar 4 EV will also be manufactured at the Busan plant starting in 2025, becoming the first fully electric car from an overseas brand to be made in Korea, with a portion of the production total sold locally and the remainder exported to North America.

The Swedish EV company is jointly owned by Volvo Cars and China-based Geely Automobile Holdings, which also acquired a 34.02 percent stake in Renault Korea Motors in 2022 to become its second-largest shareholder.

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