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| The 2018 Renault Clio hatchback / Courtesy of Renault Samsung |
Renault Samsung is moving to remove "Samsung" from its brand name, which will save the company about 30 billion won ($28 million) in annual royalties paid to Samsung Group, as more Korean motorists are aware of the French automaker Renault.
Analysts say the move will improve its financial status if it gets rid of the name of the nation's largest conglomerate.
The French carmaker's local unit in Korea had tried to take a similar measure when it started importing and selling the QM3 crossover from Spain in 2013, but decided to keep the name "Samsung" in the brand based on its belief that the Renault brand itself was still too foreign to Korean customers at that time.
However, Renault Samsung decided to use Renault's diamond-shape emblem for its Tweazy electric minicar for the first time when the model was introduced in Korea in the second half of 2017.
A Renault Samsung official said it will continue its emblem trend with the 2018 Clio hatchback instead of using its previous "eye-of-typhoon" emblem.
"We decided to keep the Renault Samsung's emblem for our domestically produced models while using the new emblem for the imported models," said the official.
"Korean customers, especially in their 20s and 30s, are becoming familiar with the Renault brand. The Clio hatchback is a monumental model in the European market, which has spearheaded Renault's most important commercial success. We believe the model's French emotions will attract the nation's young motorists as well."
However, the official declined to comment about whether to renew its royalty contract with Samsung Group.
"The contract with Samsung is scheduled to expire in July 2020. It still has two years. It is hard to comment about it at this point."
The carmaker's move to separate itself from Samsung is evident as Renault Samsung completed the design renovation in its dealerships across the country last year removing the Samsung name from its identity.
"To youngsters, Samsung is another outdated brand with an image of a typical arrogant chaebol family. Renault sounds much better than Renault Samsung to them," said an amateur racer surnamed Park.
"I don't understand the reason why it has kept the Samsung brand with having to pay them tens of billions of won."
Renault Samsung has paid Samsung a 0.8 percent royalty from its total domestic earnings before interest and tax (EBIT). Its domestic EBIT marked about 400 billion won last year, so was subject to pay about 30 billion won in royalties.
