Nissan cuts Renault order by 40%

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Nissan cuts Renault order by 40%

Nissan Motor has told Renault Samsung Motors that it will reduce its consignment orders for this year, adding pressure to the already struggling Busan-based automaker currently embroiled in a labor dispute.

The Japanese automaker has decided to reduce orders for its Rogue SUV by 40 percent this year from the previous year.

“Nissan has notified us that it will reduce this year’s orders to 60,000 units, 20,000 less than the 80,000 agreed on in the memorandum of understanding in 2014,” said a Renault Samsung Motors spokesperson.

As part of the Renault Nissan Mitsubishi Alliance, Renault Samsung agreed to build the model for five years. Total production fluctuated based on demand, with the automaker producing more than 100,000 units in the past four years thanks to the vehicle’s popularity in the United States.

The decision comes amid conflict in negotiations between management and the automaker’s labor union.

As of Monday, Renault Samsung’s union has held partial strikes for a total of 210 hours since October last year. Operation rates took a hit as negotiations broke down over union demands such as additional hires and easing of work schedules.

“As partial strikes have continued, the operation rate for the Busan factory is 20 percent lower than normal,” explained the spokesperson. “Rogue production stalled this year and it is understood that Nissan adjusted assignments on production supply considering unstable production and global sales.”

The Rogue accounted for nearly half of the Korean automaker’s total sales of 227,577 units last year.

As Rogue production falls, Renault Samsung Motors’ total annual production will likely be lower than 200,000 units. With the consignment deal for the Rogue ending this September, the automaker could face trouble.

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