SEOUL - Renault Samsung will be a one-car company for at least two more years while it focuses on rebuilding its devastated sales network, the automaker's new CEO says.
Jerome Stoll, a Renault executive who was appointed president of the renamed Korean company in August, said the emphasis will be on sales and quality over the next few years.
'Yes, it's urgent for us to introduce a new car. We can't live on one car, but we don't have enough resources to develop a new one yet,' Stoll said at a luncheon for foreign reporters here last week.
The Korean automaker was bankrupt and on the verge of closing when Renault agreed in April to acquire a 70.1 percent stake for $560 million. Renault also agreed to invest another $300 million to expand capacity and rebuild the sales network.
Although the company's showcase research and development center in Kiheung has shrunk to just 200 engineers from more than 1,000 three years ago, Stoll said the immediate priority is to rebuild the marketing and distribution network, which had collapsed when Renault stepped in.
BIGGER SALES FORCE
Before Renault agreed to acquire Samsung, the sales network had shrunk to 200 employees, he said. But that number has increased to 900 and will continue to grow, he said.
'Out of 1,000 people we recruit in coming months, 800 will be for sales,' Stoll said.
The company employs 2,730, including 1,570 in production. There are no plans to recruit independent dealers.
While acknowledging that the company's only car, a version of the previous-generation Nissan Maxima named the SM, was long in the tooth and outdated in terms of style, Stoll said it would be repositioned as the Korean market's quality product.
'We have to convince our customers of the rational reasons to buy our car,' he said. 'I think that after the (recent financial crisis), Korean customers are a lot more rational in their buying habits.'
Under Stoll, the company's sales have been improving. Last year, sales averaged 564 units a month, but will reach 4,300 units per month in the final quarter of this year.
Renault has laid out a three-phase recovery plan for the Korean automaker.
In the first phase, production will increase to 120,000 units annually by 2002 with only the single model. At the end of the first phase, a second model, widely presumed to be the Renault Megane, will be added.
In phase two, between 2003 and 2005, output will be hiked to 240,000 units per year with the product range to be expanded to three or four models. During this period, a major push will be made to export, Stoll said.
Between 2006 and 2010, in the final phase, four to five models will be built and production will be expanded to 500,000 units per year, he said. Half of the output will be exported.
The latter phase, however, would require a major capital expenditure to expand the Pusan plant's capacity from the current 240,000-unit maximum.