As it turns out, Nissan will split production of the new Rogue crossover between its Smyrna plant in Tennessee, USA, (starting from next year), and the Renault Samsung Motors factory in Busan, South Korea, (beginning in 2014).
Analysts believe that Nissan will benefit from a weak Korean won and recent free trade deals.
The French-Japanese firm said it will invest US$160 million (€130 million) to add 80,000 units of the Nissan Rogue production in Korea and "increase cost competitiveness of a key industrial base". The vehicles will be shipped to North America and select Asian countries.
"Adding production in Korea shows a commitment across the Alliance to helping Renault Samsung Motors achieve its targets for cost competitiveness and growth," said Renault-Nissan Alliance CEO Carlos Ghosn.
"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 -- and I am counting on every RSM employee to contribute to the successful completion of this project," he added.
The Busan factory has a total capacity of 300,000 units per year but is expected to build only 180,000 vehicles in 2012.
Renault said that it aims to achieve a 10 percent market share in Korea this year, up from 7 percent in 2011.
As part of the Renault Samsung Motors (RSM) Revival Plan, the company plans to introduce a new small crossover and the zero-emission SM3 ZE in 2013. RSM’s current lineup includes the SM3 compact, the SM5 midsize sedan, the SM7 large sedan (rebadged for China as Renault Talisman) and the QM5 SUV, which is sold as the Renault Koleos outside Korea.
Update: A previous version of this story said that Nissan would build the new Rogue only in South Korea. Travis Parman, Director, Corporate Communications of Nissan North America told us that production will be split between its Smyrna plant and the Busan factory.
"The Rogue will be produced in the United States as well," explained Parman. "The South Korea production is intended to provide additional global capacity for the new model, for which we anticipate increased demand. The plans to move Nissan Rogue production to Nissan’s Smyrna, Tenn. plant in 2013 remain in place. Over the past 24 months, we’ve seen demand for the Rogue in the U.S. increase about 50 percent—from just under 100K units in 2010 to 126K in 2011, and we’re on a trajectory to pass 150K units in 2012."