Renault Samsung Motors Corp., the South Korean unit of Renault SA of France, is expected to face a lower utilization rate after it stops producing the Nissan Rogue later this year, a company official said Friday.
The Nissan Rogue sport utility vehicle (SUV) accounts for 48 percent of production at Renault Samsung’s plant in Busan, but the Franco-Japanese auto alliance is unlikely to renew a contract on the vehicle’s production.
A source at Renault Samsung said renewing the contract, which will expire in September, would be “impossible,” given the high costs at the Busan plant.
Renault Samsung is getting ready to introduce a new SUV in 2020, but the plant’s utilization rate will inevitably be reduced until exports and domestic sales of the vehicle start, the Renault Samsung insider said.
The carmaker reported a 37 percent plunge in sales last month.
Renault Samsung sold 13,693 vehicles in January, down from 21,847 units a year earlier.
Domestic sales fell 19 percent to 5,174 units last month from 6,402 units a year ago. Exports declined 45 percent to 8,519 autos from 15,445 during the same period. (Yonhap)