Renault Korea Motors plans to invest 700 billion won to transform its Busan plant into a future car production base. Discussions are also underway with the French Renault Group headquarters to increase the investment scale to around 1.5 trillion won by 2027.
On March 18, Renault Korea Motors exchanged a memorandum of understanding for investment with Busan Metropolitan City at Busan Metropolitan City Hall to establish a future car production base. The key focus is shifting the production system of Renault Korea Motors’ Busan plant from being centered on internal combustion engine vehicles to being centered on hybrid and electric vehicles.
The first step is to complete the development and production system for hybrid cars within the next three years. Stéphane Deblaise, the CEO of Renault Korea Motors, announced at the signing ceremony, “We plan to invest a total of 700 billion won in the ‘Aurora 1 and 2 Project,’ which is preparing advanced hybrid models.” Of this, 118 billion won is earmarked for the replacement of production facilities by 2027. The remaining funds will be used to secure research and development (R&D) personnel for hybrid new car development and to build infrastructure. The Busan Metropolitan City has promised administrative and financial support.
Renault Korea Motors is gearing up to launch its first model from the new car project, which has been in preparation since CEO Deblaise took office in 2022. The first model is a hybrid midsize sports utility vehicle (SUV) codenamed Aurora 1, set to be launched in the second half of this year. A company official stated, “We plan to launch it domestically first and then target global markets for exports.”
Since the release of XM3 in 2020, Renault Korea Motors has not introduced any new models for four years. The success of Aurora 1 is crucial for the company’s survival. Last year, its combined domestic and export sales plummeted by nearly 40 percent to 104,276 units compared to the previous year, highlighting the urgent need for a “new car effect.”
Renault Korea Motors is considering expanding its investment to 1.5 trillion won to produce pure electric vehicles at its Busan plant. CEO Deblaise stated, “We are negotiating with the Renault Group headquarters to develop and produce next-generation electric car models following the Aurora 1 and 2 project. If confirmed, it is expected that over 1.5 trillion won in total investment will be made by 2027.” The company has also requested full support from the Busan Metropolitan City for this endeavor. If Renault Group confirms its investment in electric vehicle production at the Busan plant, it will be the first case of a foreign car manufacturer investing in electric vehicles in South Korea.
It has been reported that Renault Group is also positively considering this proposal. Guido Haak, executive vice president of Renault Group, met with Busan Metropolitan city officials in June last year, stating that “the Busan plant is an important production hub for the group” and expressing intentions to “drive the transition to future cars through large-scale investment to establish facilities for producing 200,000 electric vehicles annually in Busan.” Subsequently, Renault Group designated the Renault Korea Motors Busan plant as one of the five global hubs for targeting markets outside of Europe, entrusting the development and production of midsize and large vehicles to the facility. Starting next year, the Busan plant is also scheduled to begin contract manufacturing for Polestar, an electric vehicle brand.