[이코노믹리뷰=최동훈 기자] Dominic Signora, president of Renault Samsung Motors, recently sent a letter to the in-house executives and employees, emphasizing the need to sacrifice to recover from business difficulties. It is intended to face the reality that all members, including the union, must implement cost reduction measures such as restructuring.
In a letter sent to executives and employees on the 5th, President Signora said, “Renault Samsung Motors sold 3534 units in the domestic market last month. It is the lowest sales performance in January since 2016,” he said. “I spent 100 billion won more in cash over the past month due to factors such as sluggish sales, fixed cost expenses, and rising parts prices.”
Renault Samsung Motors recorded 6152 units, including 3534 units domestically and 2618 units exported last month. In the domestic market, the small SUV model XM3 (1,150 units), which was introduced in March last year, was added compared to the same month last year, but the results were rather low due to the poor performance of existing models such as SM6 and QM6. Imported new cars launched last year, such as Capture (92 units) and Joe (1 unit), are losing track of the market competition. In terms of export performance, the export-type XM3 (New Arcana, 1622 units) has been gradually increasing overseas supply since the Nissan Rogue, when production was completely exhausted in March last year.
President Signora explained that last year’s performance, which was hit by the Corona 19 crisis, also hit a bottom. Renault Samsung Motors sold 11,6166 units last year, including 9,5939 domestic vehicles and 22,227 exports. Despite the addition of six new models, including imported models, to the lineup, it did not achieve the original target of 100,000 domestic vehicles.
“Last year, the total number of units sold and production both reached the lowest level in 16 years since 2004,” said Mr. Signora. “Accordingly, the deficit was seen in eight years after 2012.”
“The bigger problem is that, contrary to the shrinking operating and production performance, the company’s losses are increasing further as fixed costs such as labor are maintained.”
According to Renault’s France headquarters, President Signora announced that he will focus on recovering and strengthening profitability by focusing on reducing costs rather than increasing the number of units sold this year. In the middle of last month, Renault’s headquarters announced its management strategy, Renaulution, with its main focus on improving profitability, and decided to put a scalpel in a place with low profitability among global business sites including Renault Samsung Motors.
Signora said, “Renault Samsung Motors must make an inevitable sacrifice and adapt to the new reality. In order to overcome the current situation in which cash is rapidly consumed, we will take preemptive measures to reach the break-even point as quickly as possible.”
In this letter, President Signora did not comment on labor relations. However, Renault Samsung Motors is currently being adversely affected by a wasteful conflict between labor and management in the process of improving profitability. The labor and management of Renault Samsung Motors have been negotiating wages and collective agreements in 2020 since the meeting in July, but they have not reached an agreement for eight months beyond the year. They are confronting agendas such as raising the basic salary and restructuring. The union has secured the right to strike necessary for the strike by voting for and against the members on the 1st and 2nd.