Renault Korea and GM Korea are under growing pressure to launch new vehicles, as a lack of fresh models has led to a sharp decline in their sales, industry data showed Wednesday.
Both companies have long been considered two of the so-called mid-tier automakers in Korea in terms of sales volume, but their positions are now being threatened by fast-rising brands like Tesla and solid sales performance from other conventional German luxury automakers.
Renault Korea data shows it sold 7,201 vehicles last month, down 42.2 percent from the previous year.
The sharp sales decline is attributable to the carmaker’s sales reliance on the Grand Koleos SUV and the Arkana compact SUV.
Renault Korea enjoyed a long-awaited rebound in sales last year, driven by the success of its Grand Koleos hybrid SUV, for which cumulative sales reached 51,000 vehicles as of the end of last month.
However, the new model sales effect has since faded just a year after its debut, as evidenced by the automaker’s drop in monthly sales in October.
Renault Korea is going all out to spur sales growth with the upcoming launch of the Aurora 2 project next year. The Grand Koleos was the first chapter in the project that was designed to help the carmaker rebound in Korea.
GM Korea's Trax Crossover / Korea Times file
GM Korea is in a similar situation, with sales falling by double digits last month. The carmaker’s total vehicle sales — including both domestic and overseas markets — dropped 20.8 percent in October from a year earlier.
The automaker relies on sales of its Chevrolet Trax Crossover and the Trailblazer SUV. GM Korea plans to introduce a new model — the Cadillac Escalade IQ electric SUV — for the local market this month.
Even if the vehicle is seen as a good option for those seeking luxury electric SUVs, it is unlikely to drive a major sales rebound for the carmaker because it is considered a high-end model.
The decline in sales for Renault Korea and GM Korea stands in contrast to the performance of KG Mobility (KGM).
KGM is also considered a mid-tier automaker here, alongside the local subsidiaries of Renault and GM. KGM’s auto sales increased 2.9 percent during the same period, driven by the carmaker’s strategy focusing on the launch of new vehicles for the global market.
KG Mobility's Musso EV / Courtesy of KG Mobility
Industry officials said the mid-tier carmakers may lose more market share to emerging rivals, unless they diversify their vehicle lineups for Korea and key export markets.
“The carmakers have no choice but to speed up their launches of new cars for their sustainable growth, at a critical time when Tesla is rapidly absorbing demand for eco-friendly vehicles in Korea,” an auto industry official said. “On top of that, Hyundai Motor Group is also rapidly diversifying its auto lineups equipped with a hybrid powertrain in line with growing demand for eco-friendly cars.”

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