With the auto industry facing biggest crisis in two decades, declining auto sales have led to massive job cuts. As per auto industry body SAIM (Society of Indian Automobile Manufacturers), almost 15,000 jobs, mostly temporary and casual workers, have lost jobs in the automobile manufacturing companies over the last two to three months. According to auto industry body SIAM, the entire auto sector is reeling under a prolonged slump, affecting vehicle sales across all segments. Following the past nine month trend, the July sales fell by over 18.71 per cent over the corresponding month last year.
For July, vehicle sales across categories, including passenger vehicles (PVs) and two-wheelers, stood at 18,25,148 units last month as against 22,45,223 units in July 2018. The previous biggest decline across overall domestic automobile sales was recorded in December 2000 when it fell 21.81 per cent.
"The data shows how urgent the need is for revival package from the government. There is urgent need for some kind do action. The industry is doing all it can to promote sales. I think this is the time when the industry really needs the support of government coming out with a revival package," SIAM Director General Vishnu Mathur said on Tuesday. Besides, over a million jobs are on the line in the automotive components segment, he added. With plunging sales, nearly 300 dealerships have been forced to close down leading to loss of around two lakh jobs, Mathur said.
Industry body Federation of Automobile Dealers Associations (FADA) this month said around two lakh jobs had been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump. The two lakh jobs cuts in the last three months are over and above the 32,000 people who lost employment when 286 showrooms were closed across 271 cities in the 18-month period ended April this year, said the body.
Meanwhile, the auto industry has said all stakeholders have unanimously sought a reduction in Goods and Services Tax (GST) to 18 per cent from 28 per cent due to a major slowdown in the sector. Rajan Wadhera, President, SIAM, has said there's an urgent need for the GST reduction to 18 per cent. "Need for an immediate reduction in the GST rates has been agreed unanimously by all automobile manufacturers, including the two-wheeler OEMs. This was also reiterated at a recent meeting with the finance minister where all OEMs (original equipment manufacturers) participated," he added.
Edited by Manoj Sharma with agency inputs