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"It appears to be an emergency patch to push the factory operation back to the normal level, but it doesn't appear to be a long-term strategy," said Bok Deuk-kyu, a senior analyst at Samsung Economic Research Institute in Seoul. The French carmaker had risen to No. 2 by market share in South Korea in 2003 thanks to the popularity of its SM5 model. But in recent years, it has lagged behind Hyundai, Kia and GM Korea, and is closely trailed by Ssangyong Motor. The investment comes at a difficult time for Renault Samsung. In 2011, it lost 292 billion won ($256 million) and a plunge in sales had even set off speculation that Renault may sell the South Korean unit. Ghosn said the announcement underlined its commitment to Renault Samsung. Its South Korean sales in the first half of this year plunged 33 percent from a year earlier to 83,062 vehicles. Last month, South Korea's smallest auto player Ssangyoong Motor Co. sold more cars than Renault Samsung. All automakers are eager to boost their business in rapidly growing Asia. Renault expects to sell more than half of its vehicles outside of Western Europe next year, up from 37 percent in 2010. Renault is aiming for 10 percent market share in South Korea, up from 4.4 percent in the first half of this year, and 7 percent last year. The alliance between Renault and Nissan was born in 1999, when Nissan was near bankruptcy. Ghosn, who was sent in by Renault to turn around Nissan, is revered as a management role-model in Japan. Under Ghosn, Nissan has returned to strong growth, despite setbacks last year from the earthquake and tsunami disasters in northeastern Japan. The Renault-Nissan alliance sold a record 8.03 million vehicles worldwide last year.
[Associated
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