Tuesday, July 1st, 2014
SEOUL, KOREA - Renault Samsung Motors sold off the land reserved for a second plant in Busan's Shinho Industrial Zone, which incurred the wrath of the local communities. According to company sources on June 30, the car maker disposed of 59,400 square meters of land provided by the Busan city government at a discount rate in 2000 to a shipbuilding equipment manufacturer in April this year.
The site was part of the 660,000-square-meter land left over for the next assembly plant. Industry watchers suspected that this is a sign that the auto maker may leave Korea with no intention to invest here any more. In particular, the sell-off was problematic given the company took a profit of 30 billion won from the transaction. A Renault Samsung official commented briefly, "The land we sold had little to do with our second plant site."
Last year, the number of cars produced in the Busan plant has shrunk to 130,000 as both domestic demand and exports were reduced to a minimum. Even including the 80,000 compact SUV Rogues the plant will produce from August this year under a consignment arrangement with Japan's Nissan, this year's capacity will fall short of 300,000 units.
Source : The Korea Economic Daily