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Renault-Nissan to axe hundreds of jobs in India

Snapshot: Restructuring comes as a response to a slowing demand.

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The Renault-Nissan alliance has disclosed plans to reduce production output at its assembly plant near Chennai. This decision has been taken due to poorer demand as a consequence to a slowing pace of new model launches and also due to an increasing competition coming from Hyundai and Maruti Suzuki. According to Nissan India president Guillaume Sicard, a few hundred jobs will be eliminated, but he did not reveal an exact number.

At the moment of writing, the Chennai factory employs 8,000 people of which 1,200 are temporary workers some of whom will going to lose their jobs. The current staff is in charge of building a variety of models for the Renault, Nissan and Datsun brands, but sales of these cars have gone down so they need to adjust production output based on the new demand.

Despite this decrease, Sicard says in the months to come Nissan will get back into shape and he still believes the company will achieve a 5% market share in India’s passenger car segment by the end of this decade. It’s a rather bold objective taking into account they currently have a market share of less than two percent, so more than doubling deliveries within the next five years will take some major efforts to launch new and updated models which will have to be more attractive especially in terms of pricing compared to what the competition will offer.

General Motors announced last month they will halt production at one of their two factories in India as a result of a weak demand. Renault’s sales have also decreased in recent times whereas market leader Maruti Suzuki is in great shape nowadays since their sales rose by 11% to no less than 1.17 million units. Sicard went on to specify that he believes both Nissan and Renault will be able to boost up sales starting next year thanks to a planned rollout of small models, including the highly anticipated Renault KWID.

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