March 27, 2019 12:13
Nissan has told affiliate Renault Samsung it will only order the production of 60,000 cars this year, down 40 percent compared to 2018, the Korean carmaker said Tuesday.
Nissan has been Renault Samsung's main client, accounting for half of its production volume.
"Considering the unstable output at our factory in Busan," where workers have staged a strike, "and other uncertainties, we were informed by Nissan that it had no choice to adjust production volume," Renault Samsung said in a statement.
Its contract with Nissan ends in September of this year, but it had expected orders to match last year's volume until then.
Renault Samsung produced 210,000 cars in 2018, but now output will fall to 170,000 this year, reducing the operating rate of the Busan plant from 87 percent to 70 percent, which is barely break-even point.
Renault Samsung has yet to drum up production orders for a follow-up model for the Nissan Rogue SUV it has been making, mainly due to internal wrangles at Nissan that have led to production being moved back to Japan.
Production of the new Renault XM3 for the European market, which was scheduled to be made at the Busan plant, could be handed over to the automaker's plant in Spain.
Renault Samsung CEO Dominique Signora recently flew to France to persuade management to keep production at the Busan plant but failed to get a firm answer.
Unionized workers at Renault Samsung are demanding a wage hike and have downed tools 52 times over the last six months, causing an estimated W235.2 billion in lost production (US$1=W1,135).
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