Car crisis in India: Declining sales, job cuts and far more

Car crisis in India: Declining sales, job cuts and far more
There was an enormous pressure on the Indian automobile industry during the first quarter of FY20 and it was shown by the falling domestic sales. (Image Courtesy undefined Reuters)
There is no denying the reality that the Indian automobile sector is going through a rough patch at the minute. Month after month, the business are reporting decrease in their sales numbers. This, in turn, is having unfavorable effects on the tasks as well.



Maruti Suzuki India reported a 6th successive monthly sales decrease with the numbers falling 33.5 per cent 1,09,264 systems in July 2019. Hyundai Motor India sales fell 3.8 percent to 57,310 systems during the month, while the domestic sales of Honda Cars India dived 48.67 percent to 10,250 systems. In July 2019, Mahindra & & Mahindra signed up a plunge of 15 per cent in overall sales to 40,142 units and Tata Motors saw its sales decreasing by 34 per cent to 32,938 systems.
The two-wheeler producers are dealing with a tight spot as well. Throughout July 2019, the sales of TVS Motor Business fell 13 per cent to 2,79,465 systems and Royal Enfield sales dropped 22 percent to 54,185 units. Hero MotoCorp sales dived 21.18 per cent to 5,35,810 systems and Honda Motorbike and Scooter India numbers plunged 10.77 per cent to 4,89,631 systems.
"" Liquidity crunch post the IL&FS situation, weak economic health (as the majority of crucial financial indications are either stagnant or decreasing), tighter financing conditions, uncertain regulative landscape, irregular monsoon pattern and rural distress and bad customer sentiments are amongst the major factors for decreasing vehicle sales,"" IHS Mark it Powertrain & & Compliance Forecasts Principal Analyst Suraj Ghosh told India Today.
According to Ghosh, there is a direct and proportional relationship between bad car sales and task cuts in this sector.
"" As automobile industry employs a substantial number of legal workers, continual low sales lead to changed lower production at OEMs and auto-ancillaries, and hence result in the lower requirement of such workers. Also, down the chain, several other organisations depending on the automobile market get impacted - mostly tasks at dealerships and independent auto-workshops, to name a few,"" Ghosh said.
According to a current Reuters report, the variety of short-lived workers engaged by the nation'' s largest carmaker Maruti Suzuki India fell 6 per cent to 18,845 typically throughout January-June duration with the business accelerating task cuts considering that April.
Speaking To India Today, the Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta said: "" The car component industry grows back to back with the vehicle market and currently we are experiencing 15-20 per cent production cut in the vehicle market and that is extremely well mirrored on the part industry production."
" When inquired about the task losses in the car element production market, Mehta stated that there are already job cuts to the tune of 1 lakh.
"" If the scenario persists for the next two to 3 months, the possible task loss might be as high as 1 million,"" Mehta included.
The automobile dealerships throughout India have cut nearly 2 lakh jobs in the past three months, with the Federation of Automobile Dealers Associations (FADA) fearing that the trend may continue with more display rooms being shut in the near future, a PTI report has actually declared.
There was immense pressure on the Indian car industry throughout the very first quarter of FY20 and it was proven by the information from SIAM (Society of Indian Vehicle Manufacturers). While the domestic sales plunged 15.93 per cent to 20,01,096 units in April 2019, there was a drop of 8.62 percent to 20,86,358 systems in May 2019. A decline of 12.34 % - 19,97,952 units in home sales was witnessed in June 2019.

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