Renault Samsung Motors Corp said it will reduce the number of executives and their salaries as the company has entered emergency management amid the Covid -19 pandemic.
The South Korean unit of Renault SA has suffered a sharp decline in sales due to lack of new models and the pandemic's impact on production and sales.
The company plans to cut the number of executives by 40 per cent to 30 and pay by 20 per cent starting in January, a spokesman said over the phone. It reportedly may consider offering a voluntary retirement program to employees.
Renault Samsung reported an operating loss for the first time in eight years last year as its sales fell 35 per cent to 116,166 vehicles from 177,450 units a year earlier, reports Yonhap news agency.
Its domestic sales rose 11 per cent to 95,939 units from 86,859 during the same period, but exports plunged 78 percent to 20,227 autos from 90,591.
That's mainly because the company stopped production of the Nissan Rogue SUV at the Busan plant in March last year.
Moreover, it suspended the operation of its sole plant in Busan, 450 km southeast of Seoul, during Sept. 25-Oct. 18, several days in November and December to control its inventory.
The company expects the planned exports of the XM3 SUV to Europe this year will help improve its lacklustre sales. It began to produce the XM3 in Busan for local sales in September.
The company's current passenger car lineup includes the all-electric SM3 Z.E. sedan, the SM6 sedan, the XM3 SUV and the QM6 SUV.
Renault holds an 81 per cent stake in Renault Samsung.