BUSAN < invest Korea

According to The Korea Economic Daily Global Edition,

French automaker Renault S.A. will build a new electric vehicle manufacturing plant in South Korea to meet growing demand for eco-friendly vehicles throughout Asia.

Renault, the world’s fourth-largest carmaker, will build a plant with an annual production capacity of 200,000 EVs in Busan, where it operates a car manufacturing factory, Guido Haak, vice chairman of Renault Group, said on Wednesday during a meeting with Busan Mayor Park Heong-joon in Paris.

Park is in Paris as part of a delegation with South Korean President Yoon Suk Yeol, who attended the Bureau International des Expositions (BIE) General Assembly this week to drum up support for Korea’s bid to host the World Expo 2030.

If successful, Korea plans to hold the expo in Busan, the country’s second-largest city and biggest port.

Busan is also home to Renault’s Korean manufacturing base, which currently produces seven vehicle models, with an annual production capacity of 250,000 units.

“The Busan plant is an important production base for us. We will accelerate our transition to future vehicles through large-scale investments,” the group vice chairman was quoted as saying.

Renault’s investment, if realized, would mark the first EV facility investment in Korea by a foreign carmaker.

Industry officials estimate Renault’s investment will be more than 1 trillion won ($773 million).

Given the time needed for construction, the new EV plant will begin commercial operations after 2026, they said.

An official at the French carmaker’s Korean unit, Renault Korea Motors Co., said the new EV production factory will be built using existing facilities.

However, smooth procurement of batteries in Korea could be challenging, industry officials said.

Stéphane Deblaise, chief executive of Renault Korea, said in June last year that the company, which faces an uphill battle in the country with local rivals such as Hyundai Motor Co. and Kia Corp., aims to expand its client base through more EV sales.

To that end, it plans to develop new eco-friendly models both for domestic and overseas markets by cooperating with Zhejiang Geely Holding Group Co., China’s largest privately owned carmaker.

Last year, Geely said it partnered with Renault to jointly design and produce electric hybrid and gasoline-fueled vehicles in Korea for domestic sales and exports.

Following an equity investment, Geely is currently the second-largest shareholder of Renault Korea, following the Renault Group.

Formerly known as Renault Samsung Motors Corp., the Korean unit last year dropped Samsung from its name as it ended 22 years of business ties with the Korean conglomerate.

Write to Keon-Tae Min and Il-Gue Kim at minkt@hankyung.com


In-Soo Nam edited this article.




Source: The Korea Economic Daily Global Edition (Jun 22, 2023)