Renault to Keep 70% Stake in Samsung Motors

Seoul July 1, 2005; Na Jeong-ju writing for the Korea Times reported that French automaker Renault SA has no immediate plan to reduce its shares at Renault Samsung Motors, its South Korean arm that was formally owned by Samsung Group, a departing Renault SA executive said on Thursday.

Georges Douin, who stepped down Thursday as the executive vice president of the world’s fifth largest automobile manufacturer, told Korean reporters in Paris that Renault Samsung’s current corporate governance structure will be kept intact.

``We own 70.1 percent of Renault Samsung, and Samsung has 19.9 percent. There will be no major change in the structure,’’ Douin said.

Douin’s remarks are in response to speculation that Samsung may attempt to increase its shares in the fourth largest carmaker in South Korea, which it sold to the French auto firm following the Asian financial crisis in 1997-1998. Creditor banks have the remaining 10 percent of Renault Samsung shares.

He said Renault’s alliance with Samsung will be kept strong, adding the firm will keep using the Samsung brand for its marketing in South Korea and other countries until 2010 when Renault’s contract to use the Samsung brand in Korea expires.

Renault plans to expand investment in South Korea to develop it into a strategic hub for its advance into China and surrounding Asian markets. Renault Samsung has used Nissan Motor’s technologies to manufacture the popular SM-series passenger cars under a strong business alliance with the Japanese carmaker.

Douin said Renault-Nissan CEO Carlos Ghosn, who took office last month, will visit Korea at the end of this year to announce his Asia-Pacific plans, which will include an investment package for the Korean market.

It earlier said it plans to invest a total of 600 billion won over the next three years in the Korean market. Most of the money will be used to develop a gasoline engine and a sport utility vehicle to be released in 2007.

Renault Samsung president Jerome Stoll said the company plans to expand its market share in South Korea to 23.4 percent and increase sales by 23.3 percent to 105,000 cars this year. Last year, it sold 85,098 cars, accounting for 9.3 percent of the Korean market.

Douin said Renault will enter the Chinese market in the ``very near future’’ based on its experience in South Korea.