Employees In Auto Industry Stare At An Uncertain Future As Car Sales Go Down And Down
Slumping sales of cars and motorcycles have emerged as a major reason to worry. They are triggering massive job cuts in the auto sector but there¡¯s little hope of a quick recovery.
For a country that¡¯s already been reeling under an economic down-slide and lack of new employment opportunities, slumping sales of cars and motorcycles have emerged as a major reason to worry. They are triggering massive job cuts in the auto sector but there¡¯s little hope of a quick recovery.
There was a brief euphoria in the month of October, particularly during the days preceding Diwali. Slight improvement in sales of cars was recorded during the month but come November and almost every leading car manufacturer in India has pointed out negative sales growth.
Tata Motors reported a 25.32 percent decline in total sales to 41,124 units in November. The company had sold a total of 55,074 units in the same month last year, Tata Motors said in a statement.
Total domestic sales were down 25 percent at 38,057 units as compared to 50,470 units in November last year, it added. Passenger vehicle sales in the domestic market during the month stood at 10,400 units as against 16,982 units in the same month previous year, down 39 percent.
Similarly, the company also reported a 19 percent decline in total commercial vehicle sales at 30,588 units as against 37,957 units in the year-ago period.
Meanwhile, Hyundai Motor India Ltd (HMIL) reported a 7.2 percent increase in total sales at 60,500 units in November. The company had sold 56,411 units in the same month last year, HMIL said in a statement.
For India's largest carmaker Maruti Suzuki, sales fell again in November. The company posted a 3.3% drop in its passenger vehicle sales over the last year. Homegrown auto major Mahindra and Mahindra (M&M) also reported a 9% year-on-year fall in its total sales at 41,235 units as against 45,101 units in the same month last year, it said in a regulatory filing.
News agency Reuters had earlier reported that many companies are forced to shut down factories for days and axe shifts. The cull has been so extensive, according to the Reuters report, that just the initial estimates suggested that automakers, parts manufacturers and dealers had laid off about 3,50,000 workers between April and August alone this year.
In the meanwhile, around 800 workers from different automobile companies, including Suzuki Motorcycles, Maruti Suzuki, Bellsonica Corporation, SPM Auto and others sat on an eight-hour-long protest outside the deputy commissioner¡¯s office in Gurugram.
The reason? They are fearful in the wake of continuing layoffs as they alleged that the companies are using the ¡®economic slowdown¡¯ as an excuse to terminate workers.
The automobile industry forms the backbone of India¡¯s manufacturing units and supports the livelihood of lakhs of people. A slowdown in the auto industry and layoffs have a ripple effect on truckers, cab operators as well as the retail business that caters to automobile parts.
India's second-quarter GDP growth slowed sharply to 4.5 per cent, the weakest pace in more than six years, as manufacturing output hit a slump and consumer demand as well as private investment weakened. The major factor in the GDP fall was manufacturing contracting by 1 per cent. A separate data showed core infrastructure industries' output declining 5.8 per cent in October, the biggest contraction since at least 2005.