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CHEJU ISLAND, South Korea, Aug 29 (Reuters) - Renault Samsung Motors Inc, part of French automaker Renault SA , launched its second model in South Korea on Thursday and said it has no near-term plans for plant expansion, as its only factory is capable of handling output for a third model.
The French automaker took over the former auto unit of South Korea's Samsung Group [SAGR.UL] in September 2000 and holds a controlling 70.1 percent stake.
The deal has been hailed as one of the smoothest foreign takeovers in South Korea. Renault Samsung has seen robust sales of its first model, the SM5 mid-sized sedan, since 2001, and speculation has mounted recently that the automaker could invest more to expand production.
"One shift to accommodate 120,000 automobiles annually is possible," Renault Samsung Motors CEO Jerome Stoll told a news conference at this scenic South Korean island resort, where he announced the launch of the SM3 sub-mid-sized passenger car.
"We still have a lot of room, not only to make the SM3, but also to produce a third car," he said. Renault Samsung said it recently boosted its 2002 sales target to 92,000 units this year from an earlier 88,000 vehicle target, due to robust sales of the SM5 and demand for the SM3. It sold 70,000 vehicles in 2001.
The automaker said it expects to sell 14,000 units of the SM3 this year after it hits showrooms in early September, seeking to capture a greater slice of the segment in one of Asia's fastest-growing auto markets.
Currently, the Avante XD made by South Korea's largest automaker, Hyundai Motor Co , is the top-selling brand in the sub-mid-sized passenger car segment.
The SM3 is a 1.5-litre compact sedan based on the Bluebird Sylphy, built by Japan's Nissan Motor Co .