By Kyong-Ae Choi
PAJU, South Korea--Renault Samsung Motors Corp. said on Sunday the company has given its flagship model a facelift in order to revive sales, which have slumped due to the economic slowdown and the lack of new models.
The upgraded SM5 midsize sedan will help the company's sales "take off" and recover lost ground, Renault Samsung Chief Executive Francois Provost told Dow Jones Newswires after the unveiling of the car.
Renault Samsung is targeting sales of 50,000 units of the upgraded SM5 sedan next year in South Korea, with an aim to increase its market share to 22% in the midsize passenger sedan market, Mr. Provost said.
In addition, the company also plans to export 20,000 units of the upgraded sedan--under the badge of 'Latitude'--from May next year, to countries such as China, Latin America and Africa.
In the first 10 months of this year, Renault Samsung posted a 48% slump in sales of the existing SM5 model to 30,157 units, with its market share falling to about 14%. Last year, it sold a total 67,318 SM5 sedans, including exports of 17,318 units, and it grabbed a 20% share of the domestic midsize sedan market.
Renault Samsung, which is 80% owned by the French car maker, has been the worst performer among the country's five car makers in the past year due to a lack of new models. Sluggish demand in Europe and the yen's strength also dealt a blow to its sales.
"As we have imported most of the power trains from Japan, a strong yen pushed up purchasing costs of the core equipment," a company spokesman said. That's why the company is stepping up efforts to use more Korean-built auto parts. Power trains refer to a car's engine and transmission.
To keep its inventory low, Renault Samsung adjusted production by idling its sole Busan plant for several days a month over a period of 10 months ended in August.
Its overall sales of four models--the SM3 compact, SM5 midsize sedan, SM7 large sedan and QM5 sport-utility vehicle--for the first 10 months fell 40% on year to 127,959 units.
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(END) Dow Jones Newswires
November 03, 2012 23:14 ET (03:14 GMT)
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