The Korea Herald


Smaller carmakers bet big on compact SUVs

GM Korea, Renault Samsung, Ssangyong join fast-growing niche for breakthrough

By Korea Herald

Published : Feb. 3, 2013 - 20:10

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With the almost 80 percent market dominance of Hyundai and Kia cars still intact and foreign car brands aggressively expanding their local presence, the nation’s smaller carmakers ― GM Korea, Renault Samsung Motors and Ssangyong Motor ― are all pinning high hopes on a niche segment: compact sport utility vehicles.

Amid the growing acceptance of small-engine, fuel-efficient vehicles, the market for smaller SUVs has been surging globally in recent years.

GM Korea, whose global car sales last month rose 8.3 percent to 67,210 from a year ago, aims to keep up the sales momentum with the new launch of the Chevrolet Trax compact SUV later this month. 
GM Korea’s Chevrolet Trax GM Korea’s Chevrolet Trax

The Korean unit of General Motors, whose mini car Chevrolet Spark has been recording unexpected success in the U.S. recently, plays a leading role in developing and building the Trax for overseas markets as well as Korea.

Despite its compact size ― a little bigger than Nissan’s Juke and Kia’s Soul but shorter than Hyundai’s Tucson ix ― the Trax comes equipped with a 1.4-liter turbocharged gasoline engine to offer up to 140 horsepower.

Other distinctive features include Chevrolet MyLink, GM’s next-generation smart infotainment system, and a premium Bose sound system.

Though the carmaker has yet to reveal the official price tag of the new car, dealers and industry watchers predict the prices will range from 17 million won for the basic model to some 20 million won with full options.

“The price tag is likely to affect its competition with other compact sedans such as Avante and K3 as well as existing SUV models,” said an official at a Chevrolet dealership in southern Seoul, adding its traffic has surged 20-30 percent since pre-orders started last week.

Renault Samsung Motors plans to import the Captur SUV in the latter half of this year.

The Korean unit of France-based Renault Group has yet to find a new breakthrough with its car sales last month falling almost 60 percent to 5,709 from the year before.

Industry watchers say the Captur could give a breath of fresh air for the ailing carmaker.

The Captur, whose concept styling was unveiled recently, shares the platform with Nissan’s Juke, one of the best-selling compact SUVs globally, and is powered by a twin-turbocharged version of the 1.6-liter engine.

In a recent press conference, Renault Samsung CEO Francois Provost hinted the Captur production could be carried out at the carmaker’s Busan plant depending on its sales here, expressing high expectations about the upcoming launch.

Ssangyong Motor, which specializes in SUV models, has also launched a new project “X100,” a compact SUV equipped with a 1.6-liter engine. The carmaker, in partnership with its Indian owner Mahindra & Mahindra, aims for its debut in 2014.

“Amid the slowing car sales following high-flying fuel prices and the sluggish economy, smaller carmakers are targeting the niche market. Market players, including Hyundai, may gauge their strategy after the first launch of the Trax,” said an industry source, declining to be named.

By Lee Ji-yoon (