The Renault-Nissan alliance is reportedly planning massive lay-offs at its Chennai manufacturing plant in Tamil Nadu (India). According to a report by the Economic Times, nearly 3,000 jobs may be pruned at the joint-venture (JV) plant in the coming months. "The company has planned to disengage trainees, casual labour and apprentices, but the other workers will not be affected," says the report, citing an unnamed source at the factory. The move is reportedly aimed at adjusting inventory levels, which have gone up in the past three months in light of lower retail demand. The report states that the automaker is planning a 50% cut in production volumes at the plant to 20 units per hour. In addition to high inventory levels at dealerships, the factory is reportedly holding unsold stock of 5,140 units of the Renault Duster and 4,100 units of the Lodgy. Renault India has so far not responded to an IHS enquiry about the report.
Significance: If the report is indeed true, this would be a big reduction in the workforce at one of the biggest vehicle manufacturing plants in India. The JV plant has the capacity to produce 480,000 units per annum. At present, the facility produces Renault, Nissan and Datsun vehicles. The Renault Lodgy multi-purpose vehicle is the latest addition to the plant's production schedule, while series production of the recently revealed Kwid hatchback is expected to start there soon. Renault's sales in India during the first seven months of 2015 declined 11.8% year on year (y/y) to 25,813 units, while combined deliveries by Nissan and Datsun shrank 24.1% y/y to 26,570 units in the same period.
