Seoul, July 17 (Newswire): The South Korean unit of Renault SA plans to source more automotive components from local firms after its Japanese suppliers were hit by the March 11 quake and tsunami, disrupting the carmaker's production, the operation head said.
The remarks by Jean-Marie Hurtiger, released on Sunday, come as Japanese and other foreign carmakers are increasingly turning to South Korean parts makers. Japanese suppliers are reeling from the strong yen and face a potential risk of natural disasters.
In April, Renault Samsung Motors, which imports some parts of powertrains from Japan, was forced to reduce production volume at its Busan plant by about 20 percent due to supply chain disruptions in Japan.
In May, it normalised production as Japan's parts crisis eased, but the carmaker saw its sales drop 9 percent here and overseas in the first half partly because of a production loss.
"What we continue to do is... to localise as much as we can in Korea, provided that Korean suppliers are competitive, which is most of the time the case," Hurtiger, CEO and representative director of Renault Samsung Motors, told reporters.
He said the company sought to localise all powertrains.
"This is what impacted us in terms of the yen /won exchange rate in the past and what impacted us in the tsunami for instance," he said. "So I think this is a critical and priority task for us."
A media report said in February that Nissan Motor, an alliance partner of Renault, looked to boost its purchases of South Korean parts to 2 trillion won ($1.9 billion) in 2013, a 40-fold jump from last year.
Hurtiger did not confirm the report, but told Reuters: "This makes sense... The strong yen has pushed Nissan to come to South Korea for parts."
He was attending a test drive event for its revamped version of the SM7 large-sized sedan, to be launched in Korea next month. Renault Samsung is considering exporting the model to China, but not in the near future, an official told Reuters.
Hurtiger said Renault Samsung was considering introducing a new shift scheme at its Busan plant to extend production, raising optimism about its sales for the second half.
"It is not exactly a 3-shift, it is something in between... so the day the volume reaches 300,000 mark we will be able to switch to a higher mode," he said.
But he advised caution on expanding production capacity at Busan, saying it needed "study."
The Busan factory, with an annual production capacity of 300,000 vehicles, exports cars under the brands of Renault or Nissan Motor to the Middle East, China, Russia, South America and Europe. Their products include Nissan's Sunny and Almera and Renault's Fluence and Latitude.
Hurtiger also reiterated that Renault planned to expand into the small car segment, addressing concerns about its limited product line-up, cited as a major hurdle for sales expansion.
The remarks by Jean-Marie Hurtiger, released on Sunday, come as Japanese and other foreign carmakers are increasingly turning to South Korean parts makers. Japanese suppliers are reeling from the strong yen and face a potential risk of natural disasters.
In April, Renault Samsung Motors, which imports some parts of powertrains from Japan, was forced to reduce production volume at its Busan plant by about 20 percent due to supply chain disruptions in Japan.
In May, it normalised production as Japan's parts crisis eased, but the carmaker saw its sales drop 9 percent here and overseas in the first half partly because of a production loss.
"What we continue to do is... to localise as much as we can in Korea, provided that Korean suppliers are competitive, which is most of the time the case," Hurtiger, CEO and representative director of Renault Samsung Motors, told reporters.
He said the company sought to localise all powertrains.
"This is what impacted us in terms of the yen /won exchange rate in the past and what impacted us in the tsunami for instance," he said. "So I think this is a critical and priority task for us."
A media report said in February that Nissan Motor, an alliance partner of Renault, looked to boost its purchases of South Korean parts to 2 trillion won ($1.9 billion) in 2013, a 40-fold jump from last year.
Hurtiger did not confirm the report, but told Reuters: "This makes sense... The strong yen has pushed Nissan to come to South Korea for parts."
He was attending a test drive event for its revamped version of the SM7 large-sized sedan, to be launched in Korea next month. Renault Samsung is considering exporting the model to China, but not in the near future, an official told Reuters.
Hurtiger said Renault Samsung was considering introducing a new shift scheme at its Busan plant to extend production, raising optimism about its sales for the second half.
"It is not exactly a 3-shift, it is something in between... so the day the volume reaches 300,000 mark we will be able to switch to a higher mode," he said.
But he advised caution on expanding production capacity at Busan, saying it needed "study."
The Busan factory, with an annual production capacity of 300,000 vehicles, exports cars under the brands of Renault or Nissan Motor to the Middle East, China, Russia, South America and Europe. Their products include Nissan's Sunny and Almera and Renault's Fluence and Latitude.
Hurtiger also reiterated that Renault planned to expand into the small car segment, addressing concerns about its limited product line-up, cited as a major hurdle for sales expansion.
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