The joint company would be incorporated with an initial share capital of US$ 335 million, 70% of which would be held by Renault (US$ 235 million) and 30% by the Samsung group (US$ 100 million). In the longer term, Samsung could, if it so wishes, reduce its shareholding to 20%. The new company would acquire the operating assets of Samsung Motors Incorporated (Pusan plant, Kiheung R&D centre, domestic dealer network, use of the Samsung brand name) for a total of US$ 450 million, US$ 50 million of which would be paid in cash.

The business plan drawn up by Renault and Samsung should in a few years time allow full utilization of the industrial plant's capacity with annual volumes on the order of 200,000 vehicles. The new company would keep on Samsung Motors' highly qualified workforce, some of whom were trained at Nissan in Japan. The new company, with the technical support of Renault and Nissan, would seek to develop the supplier base set up by SMI.

The new company would continue production of the vehicle currently produced by Samsung and derived from a Nissan vehicle and would gradually introduce a range of Renault- and Nissan-based vehicles, adapted to the Korean market by the existing engineering facility.

Renault's objective is to move into the South Korean market, Asia's second largest, with a partner of international renown, in order to take a 10 to 15% market share with the Samsung brand and consequently, double sales volumes of the Renault-Nissan Alliance in Asia (outside Japan), which currently stand at 180,000 vehicles.

Renault considers that the bid submitted to the Samsung group and Samsung Motors' creditors represents a significant growth opportunity in Asia for the Renault-Nissan Alliance and an opportunity for our Korean partners to become an effective part of one of the world's leading automotive groups.

(March 06, 2000)