Repercussions of the continuously falling growth rates seem to be showing on Indian car makers, resulting in drastic measures. Society of Indian Automobile Manufacturers (SIAM), the auto industry body, released a detailed statistical report, which encompassed the performance of various companies for the month of July 2013. Unfortunately, passenger car sales fell by around 7.4 per cent for July 2013, making it a record consecutive ninth month, wherein the count has dipped. On the other hand, the condition of the heavy and medium commercial market has worsened with sales falling for 17 months on the trot. Statistics have revealed that domestic passenger car sales were 131163 units for July 2013 as compared to 141646 units in the corresponding period last year.
As a result of this situation, auto makers have started asking a number of temporary workers to go on a leave. This phenomenon, known as giving 'pink slips' to employees, is an unfavourable sign for the auto industry. Not only will the production levels go down, numerous workers would be jobless, thereby having no concrete source of income. Maruti Suzuki India is among the prominent names, which have asked their temporary employees to go on an indefinite leave. Reports suggest that Toyota Kirloskar Motor has also refrained from renewing the agreements of its temporary employees.
Officials from SIAM have termed this situation as a grave one, which is showing no signs of improvement in the coming future. Director General of SIAM, Vishnu Mathur, throwing light on the subject matter, said, "It is a very serious situation for the industry. The original equipment manufacturers (OEMs) have started adjusting temporary and casual workforce. In the manufacturing sector, not restricted to auto sector alone, companies by and large tend to keep more temporary and casual workers."
Industry experts feel that some drastic measures need to be taken to control the slump currently eating the Indian auto market. Reports suggest that SIAM has approached the government to intervene in this matter and take some actions to support the cause of auto makers. Plausible moves include modernisation of fleet and a decrease in the excise duty being levied on vehicles. It can be noted that the financial crisis along with high interest rates, rising fuel prices and low demand have been troubling car companies.
On a brighter note, there have been some positives signs for companies during this terrible slump. It must be noted that the introduction of new models like Ford EcoSport and Honda Amaze has generated a level of excitement among car buyers. Notably, Ford EcoSport received bookings of around 30000 in a period of 17 days. Some analysts feel that it is only a matter of time before things are restored to normal.
