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Nissan to export Rogue from Renault’s Korean plant

SEOUL - The Renault-Nissan alliance said on Friday it will invest $160 million to produce 80,000 Nissan Rogue vehicles at Renault’s South Korean factory in an attempt to increase the cost competitiveness of the struggling operation.

The Nissan crossover will be produced and exported to the United States starting in 2014, a move seen helping the Japanese carmaker ease the impact of the strong yen, meet strong demand and benefit from a South Korea-U.S. free trade deal.

Renault Samsung (RSM), the South Korean unit of the French carmaker, has been suffering from tumbling sales, which forced it to slash production in recent months.

Its Busan factory is expected to build about 180,000 vehicles this year out of a 300,000 capacity, the company said.

“The Busan announcement represents a unique ‘win-win-win’ for Renault, Nissan and RSM, demonstrating the flexibility and power of the alliance for all partners,” Renault-Nissan chief Carlos Ghosn said in a statement.

Ghosn plans to hold a news conference in Seoul later on Friday.

The won’s lower valuation makes South Korea a more attractive export base. Exports from South Korean to the United States and Europe would allow the Renault-Nissan alliance to benefit from South Korea’s free trade deals with those countries. The EU free-trade agreement has also helped Hyundai-Kia increase its presence in Europe.

Rogue was Nissan’s second-best selling car in the United States after the Altima sedan last year.

The South Korea export plan suggests that Renault sees little hope of a short-term sales recovery for the 80 percent-owned RSM brand, which suffers from an ageing and limited model line-up domestically.

RSM has taken a drubbing from Hyundai-Kia , with its domestic market share falling by more than half to less than 5 percent within two years. The Hyundai and Kia brands’ combined share rose 4 percentage points to 82 percent over the same period.