Renault Samsung to cut production as demand falls

Renault Samsung Motors plans to cut production at its only plant in South Korea from early October due to weak demand for its vehicles.

In the first eight months of 2019, the automaker's global sales declined by more than 27% to 114,705 vehicles from 157,313 in the same period of last year.

This included a 9% drop in local sales to 52,585 units and a more than 39% fall in exports to 60,464 units.

Exports in recent months had been affected by weak global demand for the Rogue SUV [X-Trail in some markets] and Nissan had cut this year's order to 60,000 units from around 100,000 last year, with further cutbacks expected in 2020.

Renault Samsung blamed the lack of new export models as one of the key reasons for the slowdown while industrial action earlier this year plus escalating political and trade frictions between South Korea and Japan have not helped.

Renault Samsung said it planned to cut output at the Busan plant from 60 vehicles per hour to 45 units from 7 October, making around 400 workers redundant.

Earlier this month the company offered voluntary retirement to all its 1,800 workers, the first since 2012, but only a few dozen took up the offer.

The automaker said it would meet with its labour union to discuss ways to operate most effectively with over staffing, including relocating assembly line workers to other tasks within the group and ending hiring contract (temporary) workers.

To make up for the order shortfall from Nissan, Renault-Samsung is talking with parent company Renault about exporting the upcoming XM3 to Europe.

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