Franco-Japanese auto alliance Renault Nissan will cut close to about 1,000 jobs in its Indian manufacturing operations as it aligns production with low demand in the market.
According to sources, the 1,000 layoff will mainly impact contract workers, apprentices and trainees at the alliance's Chennai manufacturing plant.
When contacted a Renault-Nissan spokesperson said: "India is a dynamic market. To adapt to the volatile business environment and consistent to our strategy, Renault-Nissan is continuously adapting to market needs to optimise manufacturing operations."
The Renault-Nissan alliance currently employs around 8,000 workers at its Chennai plant.
The development comes at a time when Renault is gearing up to launch its entry level car Kwid that would be priced at less than Rs 400,000 as it looks to shore up volumes in the Indian market.
On the other hand Nissan has already introduced Datsun and Datsun Go models in the Indian market targeted at the mass segment although the models have not been able to significantly increase the company's volumes.
With the Indian auto market still coming out of a prolonged slump, both the companies have been struggling to increase their sales.
In the April-July period, Renault India's total production was up 3.22 per cent at 20,265 units as against 19,631 units in the year-ago period. Its domestic sales were down 4.53 per cent to 13,628 units during the period from 14,275 units in the same period last fiscal.
Similarly, Nissan's overall production was also down 3.76 per cent to 53,078 units from 55,157 units in April-July period last fiscal. The company's domestic sales during the period also slumped 19.64 per cent to 14,138 units as against 17,595 units in the year-ago period.
The alliance has invested Rs 4,500 crore (Rs 45 billion) on the plant, which has an installed annual capacity of 480,000 units and exports to over 100 countries, making Nissan the third biggest exporter of cars from India.