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Renault plans 17.5% production cut to save £1.8bn by 2024

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Renault has laid out plans to implement 14,600 job cuts as it reduces its global vehicle production output by 17.5% in a bid to save £1.8 billion by 2024.

A day after Alliance partner Nissan announced the transformation of its global manufacturing operations and an accompanying reduction in its model range, Renault revealed similar steps which would help it share technology and knowledge to optimise efficiencies across the globe.

The brand said in a statement that it would be “drawing on the synergies of its five brands (Renault, Dacia, Renault Samsung Motors, Alpine and LADA), electric vehicles (EV), and its unique alliance with Nissan and Mitsubishi Motors” to drive the changes.

There was no confirmation of suggestions that Renault’s SUVs could be produced at Nissan’s UK manufacturing plant, in Sunderland, in a press conference this morning (May 29), but clarification was offered regarding the impact of changes on other parts of the business.

A total of 4,600 job losses in France will be added to a further 10,000 across the globe by 2024, as global production capacity is reduced from four million vehicles in 2019 to 3.3 million.

Renault has agreed the transfer of Groupe Renault's stake in Dongfeng Renault Automotive Company Ltd (DRAC), in China, to Dongfeng Motor Corporation and the cessation of Renault branded passenger car combustion engine activities in the Chinese market.

Renault said that the strategy would also include a “suspension” of planned capacity increase projects in Morocco and Romania and a study of the adaptation of the Group's production capacities in Russia as well as the rationalization of gearbox manufacturing worldwide.

“In France, four working hypotheses for optimizing the production will be the subject of in-depth consultation with all stakeholders, in particular the social partners and local authorities”, said the OEM, which is 15% owned by the French state and has been in discussions over a state-backed emergency €5bn loan guarantee to help it overcome the impact of the COVID-19 coronavirus pandemic.

Draft plans detail the reorganisation of Renault's production operations in France around strategic business areas: EVs, LCVs, the circular economy and high value-added innovation.

It said that there would be “open reflection” on the reconversion of the Dieppe plant at the end of the production of the Alpine A110 sports car, meanwhile, as the creation of a circular economy ecosystem at its Flins production facility would include the transfer of Choisy-le-Roi's activities.

A strategic review will also be held at the Fonderie de Bretagne production site.

Jean-Dominique Senard, chairman of the board of directors of Renault, said: “In a context of uncertainty and complexity, this project is vital to guarantee a solid and sustainable performance, with customer satisfaction as a priority.

“By capitalizing on our many assets such as the electric vehicle, by capitalizing on the resources and technologies of Groupe Renault and the Alliance, and by reducing the complexity of development and production of our vehicles, we want to generate economies of scale to restore our overall profitability and ensure our development in France and internationally.

“This project will enable us to look to the future with confidence.”

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