Renault has decided to halve output to 20 cars an hour, blaming inventory that has accumulated over the last three months as Indian consumers hold back from big purchases. (Reuters)
Renault-Nissan India has axed a portion of the company's temporary workers, operating at the plant near here, in the last few days. When contacted, the alliance spokesperson confirmed the development, but however declined to give any specific number of workers axed. It estimated that around 1,000 temporary workers have been asked to go. A total of about 8,000 workers report at the plant, which has no workers' union.
The temporary work force, were largely trainees on the shop floor and casual labourers with their service ranging between six months to one year, sources told FE. It may be recalled that mid last year, there were huge protests at the plant site as the alliance partners axed a section of the workers, who had put in three years of service.
This development comes at a time when Renault is about to officially start selling its much awaited compact car `Kwid' in October, followed by Nissan's another small product sometime early next year. Carl Ghosn, the global CEO and chairman of the alliance, was here a few months ago to unveil `Kwid'.
"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," the Renault-Nissan India spokesperson said. "Renault-Nissan has made significant investments in India to establish a world class manufacturing plant with 480,000 units per annum capacity. The plant caters to Nissan, Datsun and Renault brands for both domestic and export requirements," the person added.
Though the company officials declined to give any specific reason, sources here pointed out that except SUV Duster, most of the alliance products had failed to macth expectations. This was admitted by some of the officials during a recent press conference.
Renault India's total production was up 3.22% to 20,265 in the April-July period as against 19,631 units in the same period a year ago. However, its domestic sales fell 4.5% to 13,628 units during the period from 14,275 units in the same period last fiscal. Nissan's overall production was down 3.76% to 53,078 units as against 55,157 units in the April-July period last fiscal. The company's domestic sales during the period declined sharply 19.6% to 14,138 units as against 17,595 units in the year-ago period.
The Rs 4,500 crore plant, which was set up in 2010, has the capacity to produce 4.8 lakh vehicles. The plant produces Micra, Sunny, Datsun ranges, Koleos, Fluence, Duster, Lodgy, Terrano among other cars. The partners are exporting to over 100 countries with Nissan being the major exporter.
Workers at the plant are graded across three categories - basic, advanced and excellent - who get paid anywhere between Rs 5,000 to Rs 12,000 a month and after three years they are placed under probation with a salary of Rs 14,000 and then made permanent if required with a salary of Rs 24,000 a month.