The ongoing battle for car sales is not showing any signs of improving. We have covered many stories dedicated to the degree of car sales getting worse in the country to prove the same. Not only have auto manufacturing companies started to let their temporary workers go but also have cut their everyday work massively.
India’s largest commercial vehicle and leading car-maker, Tata Motors Ltd has Motors had to face continuous shutdowns in some past months. In fact, it has closed down for the fourth time since last month this time from Thursday to Saturday. There was production for only 15 days per month for the last two months since it has orders for only a week’s production in August. This is just scratching the surface.
Tata Motors and Maruti Suzuki India’s biggest competitor, Indian automaker Mahindra and Mahindra Ltd (M&M) is another such brand that is undergoing massive job cuts and wants the government to tackle this situation by tax reductions, to revive demand.
Effectively, Jamna Auto Industries Ltd. Based in New Delhi, excelling in auto-part making, is now planning to shut down all its factories in August, complying to weak demand from its customers.
Tata Motors Shuts Down Pune and Jamshedpur Plants for 3 Days
The pandemonic slump in automobile demand and sales in the country, has reached it brim now. Topping this off, about 350,000 workers have been laid off from the automobile sector alone, since April 2019. Now, the leading carmaker, Tata Motors Ltd has announced to shut its Pune factory and Jamshedpur factory for 3 days, starting Aug 8, to match the demand for vehicles and the production. Apparently, the production is surplus.
Even Jaguar Land Rover (JLR), Tata Motors’ luxury car unit is undergoing closure for three days, in an attempt to cut down the volumes of locally assembled models. Strategy planning divisions like the electronics division and the engineering research centre, in Pune will continue to function but the same is not the case with production units.
The fall in demand is more than 31% YoY in July for the entire passenger car segment. This was the worst decline marked in the last 20 years. The commercial vehicle industry, on the other hand saw a decline of 10.4% YoY in July. Even though the permanent workers didn’t lose their jobs, as they sign yearly agreements with the company for job security, temporary workers were brutally affected.
Same Goes for Mahindra and Mahindra
Indian automaker Mahindra and Mahindra Ltd, too saw the same cycle of jobs cuts and bad demand. They have asked the govt to intervene, by thoroughly reducing the tax. Lending crisis by banks also have contributed to this cut in production or temporary closure of plants. It believes that the govt should the GST rate to spur demands.
Now job losses are happening in four areas OEMs (original equipment makers), suppliers, dealers and unorganized sector. M&M’s heavy goods segment that makes trucks and tippers, saw its worst growth in nearly six years, as the June-quarter consolidated profit halved from a year ago, to Rs 9.14 billion.
Jamna Auto Industries Crisis
Jamna Auto Industries, the vehicle ancillary makers from Delhi, providing its services to General Motors Co, Toyota Motor Corp and Tata Motors Ltd, being India’s largest automaker by revenue has decided to shut down all its plants for August due to weak demand from its customers.
It has 9 facilities around
the country. In view of the weak customer schedule and high inventory, the
company has made changes in production schedule at all its plants. The plants
may not run or partially run on all working days in August.