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Renault Samsung struggles with sales skid, unresolved wage talks

Despite signs of South Korea’s domestic auto market on track for a sales recovery, Renault Samsung Motors, the local unit of French carmaker Renault, has been hit with plummeting sales and constant friction with its labor union in wage negotiations, industry experts said Friday.

It looks set to miss this year’s goal to sell 100,000 vehicles on the local market. The automaker sold 55,630 units here, down about 18 percent on-year, between January and August, data from the company showed.

Among five local automakers -- Hyundai, Kia, GM Korea and SsangYong Motor -- it ranks last in terms of sales. GM Korea shut down one of its plants here in late February.

“Lingering uncertainty over US auto tariffs for the company that generates profits through exports and continued wage talks are weighing on the automaker’s sales drop,” said automotive engineering professor Lee Ho-geun at Daeduk University.

“There have been quality and safety issues with the QM series here such as the power unexpectedly turning off. The ratio of complaints compared to the number of vehicles sold is relatively high at Renault Samsung Motors, and has led the price of Renault vehicles to fall in the used-car market.”

Renault Master (Renault Samsung Motors)
Renault Master (Renault Samsung Motors)

Renault Samsung Motors is also the only local automaker that has yet to settle wage talks with its labor union. The union is demanding a rise in the base monthly salary of 100,667 won ($90.90) and an additional 20,133 won for self-development, among other sticking points.

At a press conference held in late February, Renault Samsung Motors CEO Dominique Signora set modest target sales for this year, vowing to sell 100,000 units here and 170,000 units overseas.

To accomplish the goal, the Clio hatchback was launched in May. Lagging behind expectations, though, just 351 units of the Clio were sold in July, with 360 for August.

Sales of its popular SM6 sedan also dropped 46.3 percent on-year to 16,000 units in the first eight months of this year, data showed.

The popular Master truck will be released here next month to boost sales.
By Kim Bo-gyung (