Renault will cut 14,600 jobs while coronavirus destroys the automotive industry

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Hear from Nissan's COO on why carmaker closed Spain plant

The company announced Friday that it will cut costs by over 2 billion euros ($ 2.2 billion) in the next 3 years. It also plans to reduce the number of cars produced annually from 4 million to 3.3 million by 2024 and will stop selling Renault-branded vehicles in China.

Renault (RNLSY) it is part of the largest automotive alliance in the world alongside Nissan (NSANF) is Mitsubishi (MBFJF). Earlier this week, companies announced that they would manufacture fewer models, sharing production facilities and focusing on each automaker’s existing geographic and technological strengths in an effort to reduce the costs of the coronavirus pandemic.

Renault said that changes are needed due to the scale of the economic fallout from the pandemic, as well as stricter emission standards. The company, which employs 180,000 people worldwide, has said it will consult unions on the restructuring of some of its plants in France.

“Planned changes are critical to ensuring the company’s sustainability and long-term development,” said President Jean-Dominique Senard in a statement.

Shares in Renault fell nearly 50% for the year.

The decision to withdraw the Renault brand from China is part of the new alliance strategy, which will see each member take the lead in specific geographic areas while the rest follow. Nissan will pave the way for North America, the Middle East and key markets in Asia, including China and Japan. Renault will take first place in Europe and South America, while parts of Southeast Asia and Oceania have been assigned to Mitsubishi.

On Thursday, Nissan announced it is cutting production capacity by 20% and closing a factory in Spain as part of the overhaul.

– Charles Riley contributed to this report.

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