Slump in the Indian auto market seems to be continuing and taking its toll on car manufacturers across the country. It is an established fact, now, that the market has been witnessing a decline in the sales of commercial and passenger vehicles for quite some time. As per the data released by Society of Indian Automobile Manufacturers (SIAM), the sales of passenger cars fell for a record ninth consecutive month, witnessing a fall of 7.4 per cent. On the other hand, condition of the medium commercial vehicles market is worse as it is enduring a fall for the 17th consecutive month. As a result of this, the auto industry is resorting to drastic measures, wherein it is reducing the number of temporary workers in order to control the cost.
Statistics revealed by SIAM suggest that a total of 131163 units of passenger cars were sold in the domestic market in July 2013, which is much less in comparison to 141646 units sold in July 2012. As far as commercial vehicles are concerned, there has been a decline of 14.93 per cent with 55301 units being in July 2013 whereas 65008 units were sold in the corresponding period last year. The gravity of the situation has resulted in a strong reaction from all corners of the industry.
Vishnu Mathur, the Director General of SIAM, explained the effects of this slowdown and decline. "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 worker," he said. Mathur also spoke about the fact that this situation has transcended segment boundaries to affect all sections. "For the total passenger vehicles, including cars, July was the 8th straight month of decline. Similarly, for motorcycles and grand total of all categories, it was the 6th straight month of decline," he said.
Although nothing has been made official, reports suggest that Original Equipment Manufacturers (OEMs), component makers and service centres employ around two lakh, five lakh and four lakh people, respectively. The news of retrenching can be confirmed by actions taken by the likes of Maruti Suzuki India and Toyota Kirloskar Motor. While Maruti Suzuki has instructed a section of workers at the engine making facility at Manesar to take an indefinite leave, Toyota Kirloskar Motor has refrained from granting renewals to contracts of temporary employees.
There seems to be no measurable move to counter this kind of decline and stop it immediately. However, sources claim that SIAM is approaching the government to take some steps in order to make the situation slightly better. Some of these steps include reducing the excise duty, lifting the ban on the purchase of new government vehicles and fleet modernisation. Although the situation is quite grave, there are a few silver linings in the dark clouds. For instance, the launch of cars like Honda Amaze and Ford EcoSport has triggered a great response from consumers.
