by Apra Vaidya
NEW DELHI, Aug. 5 (Xinhua) -- India has been witnessing a slowdown in the automobile sector for the past several months as the sales of new vehicles have dropped significantly, leading to massive job cuts.
According to rough estimates, out of the total 2.5 million employees working in around 26,000 automobile showrooms across the country, some 200,000 have been laid off over the past couple of months. The main reason cited is low sales.
The country's car major "Maruti Suzuki India Limited" has reported a 33.5 percent drop in its sales during July. According to the official figures released by the company, it sold a total of 109,264 units in July, including 98,210 units in the domestic market, 1,796 units of domestic original equipment manufacturer (OEM) sales, and the export sales of 9258 units. The company sold 402,594 vehicles during the April-June Quarter, lower by 17.9 percent compared to the same period in 2018.
Another vehicles manufacturer Tata Motors' Commercial and Passenger Vehicles business sales in the domestic market had dropped by 34 percent at 32,938 units in July 2019, as compared to 50,100 units sold in the same month last year. The cumulative sales for the domestic market in April-July 2019 quarter saw a decline by 23 percent at 164,817 units as compared to 214,679 units sold over the same period in 2018.
Similarly, "Hyundai Motor India Limited" reported a 3.8 percent decline in total sales at 57,310 units in July. The company said it sold a total of 59,590 units in the same month the previous year.
According to media reports, the Federation of Automobile Dealers Associations (FADA), the apex national body of automobile retail industry, mentioned that as many as 200,000 jobs had been cut across automobile dealerships in India in the last three months. Another report stated that Maruti Suzuki India had also cut nearly 6 percent of its temporary workers in view of the slowdown in sales.
FADA is engaged in the sale, service and spares of two or three-wheelers, passenger cars, utility vehicles (UVs), commercial vehicles (including buses and trucks) and tractors.
Ram Venkataramani, president of the Automotive Component Manufacturers Association of India (ACMA) had recently said that the automotive industry was facing an unprecedented slowdown, and sales of vehicles in all segments had continued to plummet for the last several months. He also warned that if the slowdown continued, around one million people might lose their jobs in the automobile sector.
ACMA is the apex body representing India’s Auto Component manufacturing industry.
Junior Minister for Heavy Industries Arjun Ram Meghwal called for a push to boost the auto sector in the country. “We all need to give push and focus on the three pillars of Gross Domestic Product (GDP) i.e. Consumption, Investment and Net Exports for the growth of the auto sector of India,” he said.
In addition to this, the Society of Indian Automobile Manufacturers (SIAM) expressed its concerns on the recent draft notification issued by Ministry of Road Transport & Highways (MoRT&H) which proposed an increase of registration charges of new vehicles by 10 to 20 times, depending upon the vehicle category. SIAM president Rajan Wadhera was quoted as saying - “Such increase in the Registration Charges of new vehicles would further aggravate the market condition negatively.”
