Renault Samsung to cut output amid poor sales

By Choi Kyong-ae

SEOUL, Sept. 30 (Yonhap) -- Renault Samsung Motors Corp. said Monday it will reduce production at its sole local plant from next month amid lower demand for its vehicles.

Renault Samsung plans to lower the units per hour (UPH) volume to 45 from the current 60 starting Oct. 7 as it suffers declining sales and a lack of a new vehicle for export, a company spokesman said over the phone.

Ahead of its planned output reduction, the carmaker offered a voluntary retirement program, the first since 2012, to its 1,800 employees early this month, but only a few dozen workers applied for the program, he said.

The company estimated some 400 workers will remain idle after the output reduction next month.

"The company will meet with the union to discuss ways to effectively operate the workforce, including the relocation of assembly line workers and the discontinuation of hiring contract workers," the spokesman said.

In a meeting with the union last month, the company said it will be difficult to maintain the current workforce as the output volume of Nissan Motor Co.'s Rogue sport utility vehicle is expected to fall sharply next year from this year's 60,000 units.

Renault Samsung had produced about 100,000 Rogue SUVs at its plant in Busan, 450 kilometers south of Seoul, for export on a manufacturing contract with Nissan.

But the Japanese carmaker cut its output allocation to the Busan plant to 60,000 from 100,000 early this year due to production losses caused by the union's strikes.

From January to August, its sales plunged 39 percent to 114,705 autos from 157,313 in the year-ago period. Renault Samsung's lineup includes the SM3 compact, the all-electric SM3 Z.E. sedan, the QM3 small SUV and the SM5, SM6 and SM7 sedans.

To offset the discontinuation of the Rogue production, Renault Samsung badly needs to secure output volume for the XM3 compact SUV for export to Europe. But the company is still in talks with its parent Renault S.A., and no decision has been made yet.

The French carmaker has an 80 percent stake in Renault Samsung.

kyongae.choi@yna.co.kr
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