Now Maruti Suzuki Cuts 3,000 Contractual Jobs As Auto Industry Faces Worst Downturn Ever

The cull in the auto industry has been so extensive that the initial estimates suggested automakers, parts manufacturers and dealers have laid off about 3,50,000 workers since April this year. But there is no relief in sight as Maruti Suzuki, a major automobile manufacturer, has now revealed that it is not renewing the contracts of 3,000 temporary employees.?

The reasons are obvious: rapidly rising inventory and an unprecedented slowdown in demand.

A worker adjusts the windscreen wipers of a parked car at a Maruti Suzuki stockyard on the outskirts of Ahmedabad. Reuters Photo

Safety norms and higher taxes have "added substantially" to the cost of cars, affecting their affordability, Mr Bhargava, the company's chairman, told shareholders at the company's annual general meeting.

India's auto sales had been declining for the ninth straight month in July and more automotive manufacturers are laying off workers and temporarily halting production to keep costs in check, news agency Reuters reported.?

File Photo

For a country already reeling under an economic down-slide and lack of new employment opportunities, slumping sales of cars and motorcycles are a big reason to worry as they are triggering massive job cuts in the auto sector, which supports the livelihood of hundreds of thousands of the Indian population.?

The industry's plight was recently 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".?

Japanese motorcycle maker Yamaha Motor and auto components makers including France's Valeo and Subros have already laid off about 1,700 temporary workers in India after a slump in sales. Subros, which is part-owned by Japan's Denso Corp and Suzuki Motor Corp, has laid off 800 workers.

The layoffs come as carmakers including Honda Motor, Tata Motors and Mahindra & Mahindra have implemented brief suspensions to production in recent weeks in the face of slow demand, separate sources said. The auto sector, which contributes more than 7 per cent to country's GDP, is facing one of its worst downturns.