Sinking car and motorcycles sales has triggered massive layoffs in the automobile industry. Many factories are shutting down operations, reducing shifts and dealers too are cutting jobs. Reuters reported close to about 3,50,000 workers were laid off since April 2019.
Its estimated that close to 15,000 workers from car and motorcycle industry, 1,00,000 from component manufacturers and thousands after dealers closed.
To revive the sector, auto executives plan to demand tax cuts and easier access to financing for both dealers and consumers at a meeting with officials from the finance ministry.
The industry’s plight was highlighted by the Automotive Component Manufactures Association of India (ACMA), with the trade body’s director general, Vinnie Mehta, saying the sector was experiencing a “recessionary phase”.
Big players such as Honda Motor, Tata Motors and Mahindra & Mahindra suspended production in recent weeks in the face of slow demand. Maruti Suzuki, country’s biggest carmaker, cut its temporary workforce by 6 percent over the past six months.
The sector employs more than 3.5 crore (35 million) people directly and indirectly, accounting for nearly half of manufacturing output.
Passenger vehicle sales have dropped for nine straight months through July, with some automakers suffering year-on-year declines of more than 30 per cent in recent months.
The auto sector, which contributes more than 7 percent of country’s GDP and is facing one of its worst downturns and is posing a big challenge for Prime Minister Narendra Modi’s government.
Source : Various