Renault Nissan to rationalise production at Chennai plant, reduce manpower

Faced with a slowdown in sales, Renault Nissan Automotive India is looking to rationalise production at its Oragadam, Chennai plant. It is understood that the company plans to reduce output to cut rising product inventory levels both at the plant as well as dealerships across the country.

This exercise may also see the company reduce manpower – mainly contract workers and trainees – at the plant. Media reports suggest more than 1,000 employees comprising contract workers, apprentices and trainees could lose their jobs.

In an emailed response to Autocar Professional, a company spokesperson said, “India is a dynamic market. To adapt to the volatile business environment and consistent to our strategy, Renault-Nissan is continuously adapting to market needs to optimise manufacturing operations.”

“Renault-Nissan has made a significant investment in India to establish a world-class manufacturing plant with 400,000 unit capacity. The plant caters to Nissan, Datsun and Renault brands for both domestic and export requirements.”

Renault and Nissan have jointly invested US 1.1 billion in the manufacturing facility at Oragadam, which currently employees more than 7,000-8,000 people. While Renault currently sells the Duster and Koleos SUVs, Fluence sedan, and Lodgy MPV, Nissan retails the Micra hatchback, Sunny sedan and the Terrano SUV. The Datsun brand in India comprises of the Go hatchback and Go+ MPV.

In the last fiscal (2014-15), Renault India sold 43,384 units, down 24.38% year on year and Nissan Motor India sold 47,474 units, up 24.85%. In the first four months of the current fiscal (April-July 2015), Renault India has sold 13,628 units, down 4.53% YoY (2013-14: 14,275), and Nissan Motor India has sold 14,138 units, down 19.65% YoY (April-July 2014: 17,595).

In terms of market share, Renault India has a 1.61 percent share and Nissan Motor India 1.56% at present.

Meanwhile, Renault is set to launch the Kwid compact car this festive season, a model which is likely to be a game-changer in the market and could give a fillip to the company’s fortunes.