April 20, 2024

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Renault Samsung Motors said Sept. 30 it will reduce production at its sole local plant from next month amid lower demand for its vehicles.

The carmaker plans to lower the units per hour volume to 45 from the current 60 starting Oct. 7 as it suffers declining sales and a lack of a new vehicle for export, a company spokesman said over the phone.

Ahead of its planned output reduction, the carmaker offered a voluntary retirement program, the first since 2012, to its 1,800 employees early this month, but only a few dozen workers applied for the program, he said.

The company estimated some 400 workers will remain idle after the output reduction next month.

“The company will meet with the union to discuss ways to effectively operate the workforce, including the relocation of assembly line workers and the discontinuation of hiring contract workers,” the spokesman said.

In a meeting with the union last month, the company said it will be difficult to maintain the current workforce as the output volume of Nissan Motor’s Rogue sport utility vehicle is expected to fall sharply next year from this year’s 60,000 units.

Renault Samsung had produced about 100,000 Rogue SUVs at its plant in Busan, 450 kilometers south of Seoul, for export on a manufacturing contract with Nissan.

But the Japanese carmaker cut its output allocation to the Busan plant to 60,000 from 100,000 early this year due to production losses caused by the union’s strikes.

By Ram Garikipati and newswires (ram@heraldcorp.com)