Renault scaling back Kadjar CUV production at Palencia, Spain plant.
Renault scaling back Kadjar CUV production at Palencia, Spain plant.

Renault Spain to Cancel Third Shift at Two Plants

Renault Spain’s cutbacks are a response to sales declines of 8% and 11% of the Megane hatchback and Kadjar CUV, respectively, in recent months. The vehicles had been selling in record numbers, but some analysts believe the slump in part is a result of cannibalization of sales by the Captur CUV.

MADRID – Renault Spain announces it will eliminate the night shift at its plants in Valladolid and Palencia, each located about 155 miles (250 km) northwest of Madrid. The action will result in the cancellation of 450 jobs in Palencia as of July 23 and 950 in Valladolid as of Aug. 13.

The third work shift was implemented in September 2014 in Valladolid, where the Captur CUV is built, and in September 2015 in Palencia, where the Megane hatchback and Kadjar CUV are assembled.

Renault Spain will run two shifts to increase productivity and cut costs in response to sales declines of 8% and 11% of the Megane and Kadjar, respectively, in recent months. The vehicles had been selling in record numbers, but some analysts believe the slump in part is a result of cannibalization of sales by the Captur.

The automaker intends to reduce daily output at both plans to 920 units. Palencia currently builds 1,300 units a day while Valladolid assembles 1,150.

Renault has said some of the workers who will lose their jobs in the coming weeks could be hired at a new foundry soon going online for the production of engines, but analysts estimate only 100 or 200 positions will become available.

The job cuts are unwelcome news to union representatives who express surprise at the drop in Megane and Kadjar sales just as ANFAC, the main Spanish association of automakers, reports industrywide production of 268,363 in April, up 31% from year-ago, and 1,038,659 units year-to-date, up 2.9% from like-2017. Sales increased 12.3% in April and 11% for the year’s first four months.

New auto jobs could be in the cards for Spain as France’s PSA Group says it will raise European production of its entire CUV range due to the strong demand for them. PSA manufactures or plans to manufacture the Citroën C3 Aircross, Opel/Vauxhall Crossland X and Opel/Vauxhall Mokka X models at the old Opel plant in Figueruelas, near Zaragoza.

 

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