ABU DHABI (Bloomberg) -- Renault-Nissan plan to increase production in South Korea to cut their reliance on Japan as a manufacturing base as the yen strengthens, CEO Carlos Ghosn said.
“With the strengthening of the yen and the competitiveness of the yuan, those who have capacity in Korea today have a plus,” Ghosn told a media roundtable in Abu Dhabi on Monday. “If something erratic happened in the exchange rate, you don't find yourself with your eggs in the same basket.”
Renault said Aug. 10 it was exploring other ways to expand its business in Southeast Asia after dropping out of the bidding for Ssangyong Motor Co., the South Korean carmaker operating under bankruptcy protection.
Korea's Renault Samsung Motors Co., 80 percent owned by Renault, operates a plant in Pusan, Korea, that exports the Nissan Sunny to the Middle East.
Nissan, Japan's third-largest carmaker, is exporting 50,000 cars annually to the Middle East from the South Korean plant, Ghosn said.
Renault separately is using the factory, with maximum capacity of 240,000 vehicles, to ramp up production of a “Latitude” version of its SM5 sedan for export to the Middle East and Europe.