Renault-Samsung's status in South Korea
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Renault-Samsung's status in South Korea
- Renault-Samsung is a minor player in Korea, both in terms of production with 4% of the local 2019 production (165,000 units out of a Korean total of 3.8 million) and in terms of sales with only 5% of Korean market. Its unique plant in Busan offers a capacity of 270,000 vehicles per year, producing in 2019 seven different models of the Renault-Nissan group:
• Three SUVs: Nissan Rogue, Renault Koleos and Renault-Samsung QM6.
• Four sedans: Renault-Samsung SM3, SM5, SM6, SM7
- But today only 61% of this capacity is used. More over, this utilisation rate has been reached thanks to Nissan Rogue and Renault Koleos models, which are only produced for export (North America for the Rogue and Europe for the Koléos). The Busan plant exports 80% of its production using these two models. The remaining 20% produced are Renault-Samsung models marketed in Korea (QM6, SM3, SM5, SM6 and SM7).
- These models experienced sales decrease from year to year, and only the QM6 (Korean version of Koléos) is still produced at a middle mass volume (close to 60 000 units in 2019). The future of the Busan plant therefore seems very unclear since Renault is not planning to replace the Renault-Samsung sedans which do not meet success on the Korean market. The XM3 (Korean version of the Renault Arkana) has just been put into production in Busan, which could be exported in Europe under the name of Renault Arkana. But even with this new model added to the production lines, the Busan plant will not reach its production capacity limit.
- Indeed, this plant could be used by Nissan as a backup plan of its Sunderland plant (UK), in the case that the Brexit negotiations with Europe put the carmaker in a difficult position. A decision which could be accelerated by the COVID-19 crisis (as South Korea seems to better manage the situation than Europe). Consequently, it is not a non sense to imagine that part of Nissan Qashqai could be also produced in Korea (not totally as the capacity is not high enough).
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How can French carmakers develop in China?
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How can French carmakers develop in China?
- French carmakers, as observed in a recent analysis, have seen their sales plummet on the Chinese market in recent years. The PSA group fell to 115,000 sales in 2019 against 730,000 in 2015, Renault to 18,000 sales against 72,000 in 2017. How the two French carmakers can still operate in China, in an increasingly competitive environment? How these carmakers can differentiate themselves to popular German brands (Volkswagen, Audi, BMW, Mercedes) or the less expensive Chinese models?
- Inovev thinks that a way which should be explored would be to rely on the image of luxury products that France represents in this country. Up to now, French carmakers didn’t succeed to create luxury or premium brands in China (or in other markets). DS from PSA tried to develop but, so far, still cannot propose models which can be seen as different (in terms of design or technologies) from other products proposed by main stream brands (European, Japanese or Korean) or even Chinese local brands.
- On the other hand, France is renowned in China on luxury cosmetic and fashion fields and Chinese tourists are very fond of these goods when they visit France. Therefore, French carmakers should capitalise on this success not in a minor way as today (promoting new cars with Paris Tour Eiffel or Champs Elysée in the background is not enough), but with a major ambition: creating a real luxury brand in association with and using the name of a luxury fashion house!
- Luxury French fashion houses (Louis Vuitton, Hermès, Channel…) has a tradition of mastering luxury products and are organised to always maintain a very high level of finished products: human resources skills and knowledge, materials choices, relation with suppliers, marketing, brand image management, customer experience…
The current organisation of French carmakers (technical centres, sales channels) limit the emergence of a real “Premium or Luxury” philosophy and therefore brand.
The current organisation of French carmakers (technical centres, sales channels) limit the emergence of a real “Premium or Luxury” philosophy and therefore brand.
- In addition, French carmakers should learn from a recent success story of a new Premium brand recently launched onto western markets and also Chinese market: Tesla. Of course Tesla is famous for its battery electric vehicles (BEVs) but has also to be analysed as the only recent brand which succeed to compete with German Premium brands, in a such short period of time. French carmakers, and especially Renault-Nissan group, is well placed in the BEV market with models relatively well sold (Nissan Leaf and Renault Zoe). It has therefore the knowledge on how to produce BEVs.
- The conclusion of this short analysis is that French carmakers with its current products, failed to convince Chinese customers and to take advantage of the last 15 years booming market. A new opportunity is emerging with electric cars. French carmakers should seriously considered a disruptive way to address the future needs of the 1st worldwide market, and creating a new luxury electric automotive brand using a French luxury house could be an answer.
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Inovev forecast 5,000 units per year for the new Peugeot Landtrek pickup
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Inovev forecast 5,000 units per year for the new Peugeot Landtrek pickup
- The PSA group had announced in 2017 that it would launch in 2020 a one ton pick-up produced in China in partnership with the Chinese carmaker Changan. PSA is already associated with this local carmaker for the production of DS brand models.
- Since that date, Changan has stopped the production of the DS models, due a too low demand. However, the project of the pick-up based on a Changan model remained, so that the PSA group unveils recently a pickup, named Landtrek. This one ton pick-up is planned to be exported worldwide and to compete with the Nissan Navara, Ford Ranger, Toyota Hilux, Isuzu D-Max, Mitsubishi L200 and VW Amarok. PSA has also another pickup in its product portfolio, the Rich, developed by Dongfeng and produced in low series in Tunisia.
- The launch of the Landtrek matches with Mercedes’s decision to drop its Nissan Navara-based X-Class model (21,000 sales in three years, or 7,000 a year). Renault may also follow Mercedes in this direction because its Alaskan, also based on the Nissan Navara, has not exceeded 8,000 sales in three years.
- The decision to sell a mid-range pickup therefore proved to be risky for the PSA group, as this market is at the same time small in Europe, hyper competitive in North America and very concentrated. Indeed, the carmakers operating on this segment are a few numbers and have a long history, which makes them legitimate.
- Note: this analysis and the related forecast have been constructed before the COVID-19 crisis.
The objective is to provide objective information regarding the activities of carmakers
The objective is to provide objective information regarding the activities of carmakers
Contact us: info@inovev.com
Read more... Inovev forecast 5,000 units per year for the new Peugeot Landtrek pickup
Inovev forecasts 100,000 units per year of the new Hyundai i20
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Inovev forecasts 100,000 units per year of the new Hyundai i20
- In mid of February, the Korean carmaker Hyundai has unveiled the new generation of its B segment sedan, the i20, which would have been initially presented in Geneva Motor Show before its cancellation. The new model design is in the continuity of the previous generation and equipped with the engines of its predecessor, namely the 3-cylinder petrol engine of 1000 cc and the four-cylinder petrol engine of 1300 cc. There will be no diesel engine on this model, as the demand in the B segment is very low. Hyundai will not propose electrified version (neither hybrid version nor electric version. The strategy of the Korean carmaker on the B segment sedan differ from the other players like Peugeot with the 208 available in thermal and full electric versions (BEV) or Renault with the Clio, marketed in thermal and mild hybrid versions. However Hyundai proposes electrified models through its SUV/CUV models Kona (BEV or HEV).
- The new Hyundai B segment sedan will be produced in the Turkish factory in Izmit as before, alongside the Hyundai i10. This A segment A has just been renewed a few months ago but is also not available in an electric version, while carmakers operating in Europe tend to switch their A segment sedan from combustion engines to the electric (Renault, Smart, Fiat…).
- Inovev forecast a production level of 100,000 units of the new i20 a year, while production fell to 90,000 units in 2019.
- Note: this analysis and the related forecast have been constructed before the COVID-19 crisis.
The objective is to provide objective information regarding the activities of carmakers
The objective is to provide objective information regarding the activities of carmakers
Contact us: info@inovev.com
Read more... Inovev forecasts 100,000 units per year of the new Hyundai i20
The Chinese market collapsed by 42,4% in the first quarter of 2020
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The Chinese market collapsed by 42,4% in the first quarter of 2020
- Due to the coronavirus crisis, industrial and commercial activity slowed down considerably in China during the first quarter of 2020. Consequently, the Chinese vehicle market (PC+UV) suffered and fell by 20% in January, more than 80% in February, and more than 43% in March, compared to the same months one year ago. Totally, during the first quarter, the Chinese market decreased by 42%.
- The Chinese Association of Automobile Manufacturers (CAAM) expects that the Chinese auto market will recover significantly in the second quarter but it is too soon to clearly foresee the consumers reaction after the crisis.
- The most affected region are the ones where strict quarantines where imposed by the Chinese government and also the most populated and the richest: Wuhan, Beijing, Shanghai and Guangzhou.
- All non-essential business activity has been cut off across much of the country and as a result car sales have come to a virtual halt. Automobile factories are the first to be affected, but as a ripple effect, many foreign automobile factories are also impacted, in particular because a part of their components comes from Chinese suppliers or from foreign suppliers established in China.
- The factories in China has restarted very gradually, from mid-March in the best of cases, because there are many logistical and supply chain issues to be resolved, as well as the difficulties of returning to work for employees. March production (-44,5%) showed lower decreasing rates compared with those in February (-80%).
- Dealers will also gradually resume operations but certainly lost sales will not be cached up easily, despite government support and the possible purchase of a second vehicle in households, in order to avoid public transport.
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Read more... The Chinese market collapsed by 42,4% in the first quarter of 2020
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