Renault Samsung Recalls SM3 Over Rear Wheel Bearing Installation(pic)

RSM SM3 Car Renault Samsung Motors (RSM, South Korea) is recalling almost 17,000 of its popular SM3 cars due to overtorqued rear wheel bearing hub assemblies. The recall, covering every SM3 built between July 1, 2002 and January 1, 2003, represents the car's entire early production run. RSM's SM3 is a front wheel drive car, based on the Japanese market Nissan Bluebird Sylphy and using the Nissan's same rear wheel hub bearing units. RSM said the bolts attaching the hub units to the suspension were overtorqued in early production, "which may hinder safe driving." According to one expert eBearing spoke to, this simply means the overtorqued fasteners are more prone to failure, especially as they age and corrode, potentially leading to a wheel-off situation. Problems with the SM3 are especially difficult for RSM because, many analysts agree, the future of RSM depends heavily on the SM3's success. RSM traces its roots to April 1998. Electronics giant Samsung Electronics, seeking to diversify, formed a joint venture with Nissan Motor Company (Japan) to build cars in South Korea. From a new, state-of-the-art USD $3 billion, 4.7 million square foot factory in the port city of Busan, the venture sold 44,000 cars its first year. But the bottom fell out in the economic collapse of 1999; sales of the Nissan Maxima-based SM5 plummeted to only 7,000 units. In September 2000, French automaker Renault stepped in via its Renault Nissan relationship, buying 70.1% of the venture for $512 million. Samsung retained 19.9% and creditors held 10%. A new CEO, Jerome Stoll, came in from Renault, cut costs and improved production. The SM3, even though based on the Nissan Bluebird, was heavily influenced by Renault and seen as the make-or-break opportunity for Renault Samsung. Fortunately, the SM3 was a hit, selling over 1,000 units a week. During the production run covered by the recall, SM3's order backlog routinely topped 10,000 units. Added to recovering SM5 sales, Renault Samsung production hit almost 120,000 units in 2002, although it was still less than half the Busan plant's designed capacity. An auto industry analyst said it is hard to fault Renault Samsung for SM3 initial build problems, "when you're used to sitting on your hands in boredom, then find customers suddenly lining up to buy everything you can make. Mistakes are bound to happen, and sometimes they don't show up for a while."