Renault SA has told workers at Renault Samsung Motors in South Korea the company needs to ramp up production and cut manufacturing costs in order to stay afloat.
Group's executive vice president in charge of manufacturing and supply chain, Jose Vicente de Los Mozos, made the comments in a video call with workers at the company's 81%-owned South Korean subsidiary's Busan plant this week.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The South Korean automaker reported a 35% drop in global vehicle sales last year to 116,166 units due mainly to plunging overseas sales following the discontinuation of export orders for the Rogue SUV from Nissan Motor.
The company last month announced an emergency cost cutting programme, including a voluntary early retirement package, management redundancies and white collar salary cuts to help reverse last year's heavy financial losses.
Last week Renault Samsung's unionised workers voted in favour of strike action to demand higher wages and in protest at the company's early retirement programme.
Last month the company began shipping the new XM3 SUV to Europe, where it is sold as the Renault Arkana.
According to local reports citing a local company executive, Renault Samsung last year pledged to improve productivity at the Busan plant in order to secure export orders to Europe for the XM3. The source said Renault at the time had agreed to allocate most of the XM3's global sales to the Busan plant, only to backtrack later due to its low productivity.
The executive added "the Busan plant's XM3 manufacturing costs per unit are twice as high as at Renault's Spanish plant, which makes the Captur SUV (which is based on the same platform). This clearly shows that the Busan plant lags far behind and the problem should be tackled immediately".
