Maruti Will Fire 3000 Temp Workers Due To Low Car Sales; Govt. Will Buy New Vehicles To Push Sales
On Tuesday, Maruti Suzuki India Ltd former CEO and current Chairman Mr R.C. Bhargava has informed that their company didn’t renew contracts for 3,000 temporary employees as a consequence of the slowdown in the automobile industry.
As he said that contractual workers give flexibility to operations of the company. He also added that they don’t have any plans of firing any of their 16,050 strong permanent workforces.
With this news, Indian Auto industry continues to decline sales for nine consecutive months till July 2019. At the end of July, news came about 10 lac Indians faced job loss due to the slow down.
News of layoffs is coming from many companies. In the middle of August, a news about Tata Motors factory shut down too.
Before that, there was news of firing 2 lac employees by car dealers at the start of this month.
Maruti Suzuki Future Plans
On one hand, manufacturers are battling with rising inventory and on the other, increase in taxes and safety norms are making the situation more difficult.
Chairman R.C. Bhargava said to its stakeholders that due to this added cost, it becomes less affordable for buyers during the company’s annual general meeting.
He also updated that the sell for commercial vehicles and two-wheelers also slashed down to a minimum.
To compensate for the loss, manufacturers have stopped production for some time to keep costs in check.
He has also informed that the company is working on new emission norms and showing interest in manufacturing CNG (compressed natural gas) and hybrid cars.
They have a plan to increase CNG vehicles production by 50% this year.
Another update is to promote electric mobility, Suzuki motor unit has started with the testing of its first electric vehicle which is very much similar to the existing Wagon R modal.
Government’s Support to Strengthen The Economy
On Friday, the Minister of Finance and Minister of Corporate Affairs Nirmala Sitharaman has announced about lifting the ban on government officials to buy new vehicles.
This ban was applied in 2014 wherein the government has banned the purchase of new vehicles for all officials.
This relaxation will give a huge relief to the automobile industry as it is facing slow down from the start of this year.
To add more information in this context, the Finance Minister said that they will allow their departments to replace their old vehicles with new ones.
The Finance Minister also advised banks to make automobile loans cheaper and increase credit availability for non-banking financial companies.
It was also informed that (Bharat Stage) BS-4 vehicles registered before March 31, 2020, will be able to run for its registration period or the entire lifetime of the vehicle. This will give huge relief to buyers and manufacturers of these vehicles.
So far Mr R.C. Bhargava is hopeful that demands for automobiles will strengthen as an effect of all the announcements by the government.
He also said that faster availability to GST (goods and service tax) refund will further stimulate the growth.