Auto Component Firms Are Firing 10 Lakh Employees; $57 Billion Worth Auto Parts Industry In Shambles
We have been getting a newer update on the worsening conditions of the Indian automobile industries. Right from the demand of vehicles of all kinds, reducing to significant levels, to such companies laying their workers off, we have covered every sphere of the whole scenario for you.
Unfortunately, the ongoing battle for car sales is not showing any signs of improving. With massive job cuts in the said industry, things are not looking good even in the distant future. It is being estimated that inspite of such masses of job cuts, there can still be seen about 10 lakh more job losses, if this situation of stagnant car sales continue.
10 lakh Jobs Still at a Risk
To compensate the sales and production of vehicles and parts, automakers such as Maruti Suzuki, Mahindra and Tata Motors have been suspending their production days, which itself is creating large spaces for losses.
Such automobile companies haven’t been firing their permanent staff but temporary workers. They very well realise that it takes experience, time and resources to create a trained worker and letting them go would be another one of these losses. Job losses has still been explainable. However, if the scenario continues for longer, an estimated 10 lakh people could be laid-off.
The 15-20% cut in production by vehicle makers has led to a crisis like situation in the auto component sector. 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. The automotive component industry contributes 2.3% to India’s GDP alone, 25% to its manufacturing GDP and provides employment to 50 lakh people.
The industry sale fixed itself at Rs 3.95 lakh crore in the last fiscal year, growing 14.5% more than its previous year. However, its bad this year.
The Ripples it Has Created
The slump in car sales and demand is not just affecting the latter industry but also the auto ancillary companies and steel industries that depend directly on them. The vehicle and component makers are reducing their contract workers and shutting down production for some days to save costs.
The cost cutting measures are such that the office air conditioning systems are switched on at 8 a.m. and turned off at 5 p.m. Work from home is encouraged too. Along with top Indian companies, Bosch Ltd too announced five days shutdown at its Gangaikondan plant in Tamil Nadu.