India: Renault-Nissan to cut jobs and reduce car production image

Not only auto parts suppliers like Schaeffler have to cut jobs, but Renault-Nissan Alliance is looking to lay off hundreds of people in India and trim down production at its plant near Chennai, according to a top executive of the company.

The Franco-Japanese group made this decision due to not so good sales that were caused by the slow pace of new product launches and also because of competitors like Maruti Suzuki India Ltd. that has a market share of 48% and Hyundai Motor Co. which is standing strong at 17%.

Guillaume Sicard, president of Nissan India, said that “Domestic sales are going through ups and downs. Today we are in a situation where we need to adapt slightly the workforce for our plant.”

There are 8,000 people working at the Chennai plant at the moment, out of which 1,200 are temporary employees. Out of the latter, some will be laid off according to Sicard. Despite the alliance’s decision to do so, Nissan is still going to meet its target of having 5% share of the car market in India by 2020. Tata Motors is going to have some competition since the Indian carmaker, which currently owns 5.7% of the market share is also looking for a bigger slice of the market share pie.

New car launches in India have led to bigger car sales and seem to have put a stop to a struggling growth over the past few years. However, drivers are still not investing big time in car ownership as they are looking for the economy to make a bigger recovery. Despite passenger car sales growing 5% up to March, global carmakers like General Motors, Volkswagen AG and Ford Motor Co., all reported double-digit declines in sales.

By Gabriela Florea