Renault Group Temporarily Closes Production Plants

Renault Group today announced the production in no less than five production plants across Europe will be temporarily stopped due to decreasing demand in main emerging markets. Basically, Renault takes the same decisions as the other carmakers around the world who saw their sales going down as a result of the global recession. Earlier this month, Renault revealed a 14.1 percent market decrease for October 2008 when compared to the same month of 2007, with very low sales in Russia, Brazil, Romania and Turkey, Renault's main markets.

The French carmaker aims to reduce production down to the levels of end-2007 in order to help dealerships and subsidiaries establish a interdependent relation between sales and market demand.

“To this aim, Renault has set up a marketing plan to help to reduce inventory in the network; for example, in France, the used vehicle promotion “Occasions Renault at Argus price”. Another example is Renault’s paying for the cost of transportation of new vehicles exchanged between dealers,” Renault said in a statement released to the press.

In Romania, Dacia's Pitesti-based factory will be closed from November 20 to December 7, Renault said, while in France the Flins plant will be shut down between November 20 and December 30. The STA Ruiz factory will be temporarily unavailable from December 10 to January 3, while two Spanish factories, in Valladolid and Palencia, will close their doors for 11 and 14 days, respectively.

“The production reduction we are engaging is our answer to the rough decline of the automotive market to adjust our inventory level to the expected sales volume. Our aim is to come back, at the end of 2008, at the same level as end of 2007,” says Michel Faivre-Duboz, SVP, Supply Chain Worldwide.