The chief executive of Renault Samsung Motors Corp., the South Korean unit of French automaker Renault S.A., denied speculation about a pullout by the French automaker even as production is expected to be halved this year after the alliance denied replacement mainstay models in the strike-ridden factory in Busan.

According to the Busan Metropolitan Government announced Wednesday, Renault Samsung CEO Dominique Signora met with Busan City Mayor Oh Keo-don behind closed doors on Tuesday and assured that Renault would stay committed to the Korean market.

Signora emphasized that the XM3 Inspire, its new SUV model that will be available in the first half of 2020, has been developed to meet the needs of Korean customers. Efforts have continued to maintain competitiveness in Korea, such as development of new models of its flagship mid-sized sedan SM6 and SUV QM6 for Korean customers, and cutting-edge technologies like donut-shaped LPG tank that enhances LPG vehicles’ trunk space by about 40 percent, he added.

Concerns have been growing recently about the fate of the foreign-owned carmaker’s only plant in Busan, the southern port city in Korea, as the factory has been suffering from the six-month-long labor-management disputes. The company’s car sales in Korea, which already suffered from falling before the dispute began, have continued its downward spiral coupled with declining production due to the strikes.

Signora however said the management cannot accept to the union call for its approval in work arrangements, claiming work schedule cannot be subject to collective bargaining as by doing so can risk damage to productivity and competitiveness in the alliance global network.

Exports account for about 65 percent of production at the Busan plant.

Oh and Signora agreed that the city and the company have to enhance support to partners and subcontractors of Renault Samsung as their businesses have significantly hurt by the troubles at the finished car assembly site.

Renault Samsung is the largest company in Busan, with annual sales of 6.7 trillion won ($5.87 billion). It holds considerable sway in the regional economy as it represents more than one-fifth of the area’s total exports. It also commands an extensive network of auto part suppliers and partners whose combined annual revenue totals 500 billion won.

By Park Dong-min and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]